Under the heading "Yankees Go Home," I predicted last month: "Swiss bankers have concluded they don't need or want Americans any more, with all the costly and legally dangerous U.S. government red tape."
I explained in detail then about the greatly expanded Qualified Intermediary (QI) rules the U.S. Internal Revenue Service wants to impose on all foreign banks that do business with U.S. persons.
I said then: "Tens of thousands of Americans already are suffering because of what can best be described as a diabolical 'financial apartheid' -- disruptive rules being imposed on Swiss and other offshore banks by the U.S. Internal Revenue Service (IRS) and the U.S. Securities and Exchange Commission (SEC)."
Call from Zurich
This morning I received a phone call from Rob Vrijhof, (right) our long time investment and banking associates in Zurich and a member of the Sovereign Society Council of Experts. Rob called my attention to the announcement today by the venerable Wegelin & Co., Switzerland’s oldest private bank, that it will stop doing business in the United States and with Americans.
Founded in 1741, the St. Gallen-based bank, said their decision was in response to stricter measures introduced in the U.S. against tax evasion and projected changes in U.S. estate tax laws which could make some non-U.S. citizens liable for U.S. taxes if they inherit U.S. securities.
The bank did not mention new U.S. government demands that offshore banks giving investment advice to U.S. persons must register and qualify under SEC rules, a blatantly illegal attempt to extend American law well beyond its normal jurisdictional area which ends at the U.S. border.
So drastic have the IRS/SEC extraterritorial measures become that even members of the U.S. Congress have protested they go to far.
"Untenable Position"
The bank let the United States have an added zinger, saying it believes the U.S. government overestimates its attraction as a financial center, thus Wegelin is advising its clients to pull out of all U.S. securities investments.
The decision comes a week after U.S. tax authorities reached a deal with the Swiss government which under which UBS will surrender details of 4,500 of its U.S. clients suspected of alleged tax evasion.
More to Come?
Wegelin & Co. is Switzerland’s oldest bank. It operates in nine locations throughout Switzerland, has over 450 employees, and currently manages client assets of over CHF 20 billion (US$17.9 billion).
As a limited partnership, Wegelin & Co. is one of the few Swiss private remaining banks whose managing partners bear unlimited liability. Wegelin & Co. specializes in asset management for private and institutional clients.
But if Wegelin & Co. has opted out, can others be far behind?
Already the IRS plagued UBS (for selfish reasons) has abandoned it U.S. customers, as has Credit Suisse. Reports say that some Swiss private banks still are willing to serve American clients, and we know that to be true. British bankers also have been dicussing a ban on U.S. clients.
We Can Help You
The Sovereign Society now have in place agreements with reputable Swiss private banks willing to accept new accounts from those who identify themselves as our members.
These arrangements are in full compliance with IRS and SEC rules and with other U.S. laws. A U.S. client must sign an IRS Form W-9 that allows the offshore bank to report required information to the IRS.
As it has been since our founding 11 years ago, our staff is available to assist in opening a Swiss or other offshore account.
Take advantage of these special Swiss banking arrangements -- sign up here for Sovereign Society membership. Once you are a member, you can contact us for help via email at info@sovereignsociety.com
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