Wegelin & Co.
Private Bankers since 1741
Farewell America
1. A moral issue?
The agreement between the USA and Switzerland
under which Switzerland is to provide administrative
assistance with regard to 4,450 UBS
clients suspected of tax fraud is, in our view, remarkable
in three ways. Firstly, we note the way
both parties are dressing it up in the aftermath of
the battle. Everyone is talking of a âsuccessâ. The
IRS, the American tax authority, surely rightly,
for it has got what it wanted, namely access to a
large number of specific client names, combined
with persisting uncertainty on the part of all the
others as to whether they are among those names.
The UBS is happy not to have to pay another
fine, and to be rid of the heavy burden of legal
proceedings. And the Swiss government regards it
as a success inasmuch as from their perspective
the agreement preserves the rule of law and offers
the clients affected the possibility of legal recourse
to the federal administrative court.
But there are also losers, of course. These are the
people affected, who must now expect legal proceedings
against them as suspected tax cheats,
and who had, until relatively recently, been promised
that precisely this would not happen. Promised
by whom? By the bank concerned (among
others), which had generously interpreted and
intensively exploited an explicit gap in the 2001
âQualified Intermediaryâ (QI) agreement; by the
supervisory authorities, which were fully cognizant
of all this activity, but never questioned it; by
the Swiss government, which only a few months
ago had spoken of the âbrick wallâ that foreign
authorities would encounter, were they to attack
Swiss banking secrecy â for example through
fishing expeditions, such as an application for
administrative assistance against several thousand
clients. Promises, connivance, a pretence of resolute
behaviour â and now collapse. The appearance
of success conceals the reality of a breach of
trust.
Trust: is this the right word at all for something so
disgraceful as tax evasion, or even tax fraud?
Serves them right, these bloated capitalists, if they
land in the dock! This is the position of themoralizers,
as frequently stated in the Swiss media,
among others. It is astounding, and this is the
second interesting observation, how completely
naturally those who claim the moral high-ground
rush to join forces with the authorities and their
financial requirements. At the risk of once again
winding up certain specialists in business ethics,
let us briefly recall the sort of tax authorities we
are dealing with, and the sort of state they serve: a
country that, over the last 60 years, has unquestionably
been one of the most aggressive nations
in the world. The USA has fought by far the largest
number of wars, sometimes with, but mostly
without a UN mandate. It has broken the international
laws of war, maintained secret prisons, and
fought an absurd war against drugs, with serious
consequences both abroad (Columbia, Afghanistan)
and at home (according to reliable sources,
the tentacles of the narcotics mafia now reach
well into political circles). With breathtaking
moral duplicity, the USA maintains enormous
offshore havens in Florida, Delaware and others
of its states. The moralizers have joined sides with
a nation that still makes extensive use of the
death penalty, and that has a legal system under
which lawyers can get rich on the misfortunes of
their clients. Liability cases often end in verdicts
with exorbitant damages, which makes business
activity extremely risky, for medium-sized enterprises
in particular. The moralizers provide intellectual
support for a country that allows its infrastructure
to collapse, and then stuffs convicts into
hopelessly overfilled jails, after what are not infrequently
dubious proceedings. They fund a
nation that tolerates â or rather, causes â regular
crises in the global financial system that it manages.
A country whose underclass enjoys neither
the benefits of an adequate education, nor a halfway
functional healthcare system; a country
whose economic system is increasingly inclined to
overconsumption, and in which saving and investing
have increasingly become alien concepts, a
situation that has undoubtedly been one of the
driving forces behind the current recession, with
all its catastrophic consequences for the whole
world.
http://www.zerohedge.com/sites/default/files/Wegelin Document on American Taxes and Assets.pdf
Private Bankers since 1741
Farewell America
1. A moral issue?
The agreement between the USA and Switzerland
under which Switzerland is to provide administrative
assistance with regard to 4,450 UBS
clients suspected of tax fraud is, in our view, remarkable
in three ways. Firstly, we note the way
both parties are dressing it up in the aftermath of
the battle. Everyone is talking of a âsuccessâ. The
IRS, the American tax authority, surely rightly,
for it has got what it wanted, namely access to a
large number of specific client names, combined
with persisting uncertainty on the part of all the
others as to whether they are among those names.
The UBS is happy not to have to pay another
fine, and to be rid of the heavy burden of legal
proceedings. And the Swiss government regards it
as a success inasmuch as from their perspective
the agreement preserves the rule of law and offers
the clients affected the possibility of legal recourse
to the federal administrative court.
But there are also losers, of course. These are the
people affected, who must now expect legal proceedings
against them as suspected tax cheats,
and who had, until relatively recently, been promised
that precisely this would not happen. Promised
by whom? By the bank concerned (among
others), which had generously interpreted and
intensively exploited an explicit gap in the 2001
âQualified Intermediaryâ (QI) agreement; by the
supervisory authorities, which were fully cognizant
of all this activity, but never questioned it; by
the Swiss government, which only a few months
ago had spoken of the âbrick wallâ that foreign
authorities would encounter, were they to attack
Swiss banking secrecy â for example through
fishing expeditions, such as an application for
administrative assistance against several thousand
clients. Promises, connivance, a pretence of resolute
behaviour â and now collapse. The appearance
of success conceals the reality of a breach of
trust.
Trust: is this the right word at all for something so
disgraceful as tax evasion, or even tax fraud?
Serves them right, these bloated capitalists, if they
land in the dock! This is the position of themoralizers,
as frequently stated in the Swiss media,
among others. It is astounding, and this is the
second interesting observation, how completely
naturally those who claim the moral high-ground
rush to join forces with the authorities and their
financial requirements. At the risk of once again
winding up certain specialists in business ethics,
let us briefly recall the sort of tax authorities we
are dealing with, and the sort of state they serve: a
country that, over the last 60 years, has unquestionably
been one of the most aggressive nations
in the world. The USA has fought by far the largest
number of wars, sometimes with, but mostly
without a UN mandate. It has broken the international
laws of war, maintained secret prisons, and
fought an absurd war against drugs, with serious
consequences both abroad (Columbia, Afghanistan)
and at home (according to reliable sources,
the tentacles of the narcotics mafia now reach
well into political circles). With breathtaking
moral duplicity, the USA maintains enormous
offshore havens in Florida, Delaware and others
of its states. The moralizers have joined sides with
a nation that still makes extensive use of the
death penalty, and that has a legal system under
which lawyers can get rich on the misfortunes of
their clients. Liability cases often end in verdicts
with exorbitant damages, which makes business
activity extremely risky, for medium-sized enterprises
in particular. The moralizers provide intellectual
support for a country that allows its infrastructure
to collapse, and then stuffs convicts into
hopelessly overfilled jails, after what are not infrequently
dubious proceedings. They fund a
nation that tolerates â or rather, causes â regular
crises in the global financial system that it manages.
A country whose underclass enjoys neither
the benefits of an adequate education, nor a halfway
functional healthcare system; a country
whose economic system is increasingly inclined to
overconsumption, and in which saving and investing
have increasingly become alien concepts, a
situation that has undoubtedly been one of the
driving forces behind the current recession, with
all its catastrophic consequences for the whole
world.
http://www.zerohedge.com/sites/default/files/Wegelin Document on American Taxes and Assets.pdf