The US extends banker hunting season
The recent arrest of Raoul Weil, the Swiss UBS Bank top manager, in Bologna in Italy upon US request has demonstrated US taxmen’s firm intention to find their fellow countrymen’s hidden incomes at all costs. Mr. Weil is suspected of aiding tax evasion against the US government. Since Switzerland signed the international Convention on Administrative Assistance in Tax on the 15th of October, aiding US tax evaders on the territory of 58 countries gets into the US judicial authorities’ field of interest.
The earliest facts of court action against Swiss bankers can be traced to the 1980s, Managing Director of the ALOR group of companies Sergey Khestanov told The Voice of Russia.
“Starting with the 1980s the US judicial authorities’ level of competence in investigating tax evaders’ cases has made so much progress that foreign bankers, first of all Swiss ones, regularly come under firenow. Switzerland ranks unique among developed countries. On the one hand, the rule of law is very high in Switzerland. On the other, loyalty to foreign tax evaders is also high”.
The above mentioned Convention is one of the main instruments in the struggle against tax evasion. The member-states provide each other with relevant information in the area of urgent and preliminary enquiries, and jointly cooperate in tax inspection. Currently Switzerland is not a permanent member of the Convention, this issue is to be finally confirmed by the Swiss parliament. Still, even before this takes place, dynamic activity of the US tax authorities in the international field resulted in a shutdown of one of the oldest Swiss private banks Wegelin& Co. in January this year. In March a US court compelled this bank, that admitted aiding US tax evaders, to pay the US government various fines and compensations worth $74 billion.
Bank Frey & Co.AG was the next to fall victim to US banker hunters. It announced suspense of activities as recently as the middle of October. The reason is the same - complaints against this bank on the part of the US authorities about aiding US citizens in tax evasion. Speaking about Swiss financiers who shielded US tax evaders, at least a thousand of bankers on various financial levels currently fear pending US judicial punishment.
All this runs counter to the new law recently adopted in the US, says Yuri Yudenkov, Professor ofthe Finance Dept. of the Russian Academy of National Economy. It is the so called FATKA systemaimed at mobilizing the money made by US citizens anywhere in the world, Professor Yudenkov told The Voice of Russia.
"The US government prosecutes all banks and corporations that do not necessarily shield but maybe sometimes incidentally help Americans to evade paying tax. Accordingly, bankers who happened to participate in US citizens’ schemes in tax evasion are considered guilty by the US law."
However, in this case we should not believe in the selectivity or double standards of the US justice, Yuri Yudenkov explains. If, for example,US financiers at home are accused of helping their fellow countrymen to evade tax they will be similarly prosecuted by the US court. Thus, cooking the books is punished with up to 20 years in prison in the US, the expert points out.
Generally speaking, the new US law – FATKA – is rather strict, experts sum up. One can be subjected to paying huge fines even through lack of knowledge and anything at all can be the formal cause for arrest.