Three Perspectives on the American Fiscal Dossier

The acquittal of Raoul Weil provoked numerous comments — comments that highlight the courage of this man, who took on his highly powerful accusers and won. He did so by convincing all members of an American jury that he could not be considered guilty of conspiracy to defraud the Internal Revenue Service. Moreover, it was recognized that he had the right to a transparent and fair trial, despite the pressure the prosecutors placed on the witnesses.

Many observers considered this verdict, which revealed the weaknesses in the American prosecutors’ case, to be a clear relief for Swiss banks. The risk that the United States could still accuse them has, however, not passed fully. As for Raoul Weil, he stated that his trial had been politically motivated. If his verdict had come sooner, he added, it would have dissuaded many Swiss banks from signing up to category 2* [status]. Seeing as they are already supposed to have given a great deal of information to the American authorities, which may be used against them if they are taken to court, to a certain degree, these banks are trapped.

The Non-Prosecution Agreement project, sent by the Department of Justice to the hundreds of Swiss banks that subscribe to the U.S. program, confirms both Weil’s analysis that the American authorities acted for political reasons and their unscrupulous behavior. Indeed, the Department of Justice’s new requirements for allowing Swiss banks to escape trial go well beyond those announced in the program they finalized, and which the Swiss government accepted in 2013.

The requirement to provide information immediately will not only apply to the Swiss banks concerned, but also to their parent companies and branches, as well as to their administrators, directors, managers, employees and external consultants. The Swiss banks are required to cooperate fully with any authority designated by the Department of Justice, be it American or otherwise. This obligation to cooperate does not have a time limit; no explicit guarantee is given that Swiss laws about the requirements imposed upon Swiss banks will be adhered to. Of course, it is simply a project that can be negotiated and adapted. However, the nature and the extent of these new requirements have not failed to ignite genuine concerns at the heart of Swiss banking institutes.

This demonstrates that the American Department of Justice is currently looking to benefit from a ratio of power that favors them considerably. They did the same in 2013 while imposing their program — under duress and, to a certain extent, via blackmail. These are not the honey-coated words of Suzan G. LeVine, American ambassador to Switzerland, who celebrates the common values the two countries have, describing them as “sister republics.” This is enough to mask a reality of economical and political interests, the basis of American behavior. As Gen. Charles de Gaulle enjoyed reminding us, the Americans are not our friends — all they have are their interests.

Of course, this disastrous situation results in part from the Swiss government’s strategic errors. For some years now, the government has demonstrated a regrettable weakness when faced with external pressure, and has shown naïveté, or at the very least, ignorance of American methods when trying to reach agreements that would facilitate a comprehensive settlement with American authorities. Furthermore, Federal Councilor Eveline Widmer-Schlumpf is now trying to wash her hands of this program, which she presented as the fruit of an agreement negotiated with the United States after having more or less imposed it on the banking sector. She did so by declaring that the Swiss authorities are not implicated in its execution, and that the banks should take care of things themselves.

The recent meeting of the global forum for the Organization of Economic Cooperation and Development provided a complement of wholly useful perspectives on the American authorities’ real motivation. At the conclusion of this meeting, the OECD published three lists. The first indicates those countries that are preparing to apply the automatic exchange of information starting in 2017; the second lists those countries that will begin this exchange in 2018; and the third outlines those countries that either have not set a date for this exchange or have not yet made a commitment to discussing the subject.

The United States also took part in this meeting, yet, it does not feature on any of these three lists. It is only logical that the lists should cover all participants. America does, however, appear in a small note at the bottom of the page. This note mentions, in quite a confusing manner, that the U.S. wishes to apply this automatic exchange of information — in virtue of the Foreign Account Tax Compliance Act (FATCA) — from the year 2015, and that it is committed to researching the adoption of laws that would permit it to achieve reciprocity in it.

This strange method of presenting things hides neither the OECD’s embarrassment, nor above all, the fact that the United States will not apply the standard adopted by the OECD for this exchange of information. In reality, the American political and financial centers fear that the reciprocity the U.S. is supposed to accord other countries will harm their financial power, which welcomes a great deal of undeclared assets from foreign taxpayers with open arms. The leaders of this country demonstrate total hypocrisy and a flagrant contradiction between their words and their actions.

* Editor’s note: Under the Swiss bank program, a Swiss bank is a “category 2 bank” if the bank has reason to believe that it may have committed tax-related offenses under certain codes under the U.S. IRS.