Demystifying Swiss Bank Accounts

Swiss Bank Accounts
When you think about the Swiss Bank, likely what comes to mind is Switzerland’s well-known commitment to privacy. The Swiss banks have been getting money from the rich and filthy rich since the Middle Ages. These account holders would be known as account numbers, and only the banks knew their identities.

The top reason for many people that people use Swiss banks in order to evade taxes. Others were known to use it for sheltering their money from being stolen, especially during times of war. Then there are some that simply opened a Swiss bank account because it was convenient for when traveling or vacationing in the land. Plus, account holders receive a Swiss charge card.

Who are Account Holders at Swiss Banks?

There are various types of people that may come to mind, such as politicians, celebrities, dictators, socialites, industrialists, financiers, white collar criminals, and economy advocates that are underground. Other than top criminals that were known to have Swiss bank accounts, like Boston crime boss James “Whitey” Bulger, Swiss nationals and legal residents too held account with Swiss banks.

You may think they are exclusive, but in reality, anyone can open an account. You don’t have to have large amounts of money to open one either. At their web site, anyone can open an account with as little as 5,000 francs. Right now, the U.S. conversion would be $5,040. The American dollar is weaker than the Swiss franc, which has avoided the recent devaluation of currencies.

How Can I Set up an Account with a Swiss Bank?

  • You’ll have to write a correspondence letter to the bank of your choice, and should be accompanied with a money order or check.
  • You can transfer money from your bank to the Swiss bank through wire or the Internet.
  • Paypal and Western Union can be used to wire transfer or do money exchange, but contact the bank beforehand.
  • You can use a credit or debit card to fund the account.
  • Go to a local branch of the Swiss bank, like Credit Suisse.
  • Or go to a bank in Switzerland.

With these mundane techniques for opening an account, you may ponder how confidentiality was assumed and maintained for account holders, especially with the electronic and paper trails they leave behind. Clients of their bank that are a bit more sophisticated find ingenious ways to hide their funds, like using wire transfers, doing multiple offshoring, opening and closing accounts until their money has reached the Swiss bank. Of course, they’ll have the help of unscrupulous brokers, bankers and accountants. The account you have can also be placed in the name of another offshore company. There are some that have a global presence that is multi-layered. Then there are others that have wittily ambiguous phantom organizations that have store fronts and web sites that miraculous disappear and reappear with different names. The USA Today reported a prime example of an illicit money transfer ingenuity. Leon Cohen-Levy and Mauricio Assor, father and son hotel owners, were accused of placing revenue from the hotels to an HSBC Swiss bank account. The Panamanian firm was the account holder and the two men didn’t report their sales to the Internal Revenue Service.

With the privacy laws behind Swiss banks has brought a lot of suspicion regarding non-government and government organizations that have their money sent over to offshore Swiss accounts. Accusations have been directed that the Swiss banks’ cloak of privacy has protected drug lords, dictator, suspects of tax evasion and terrorists.

Think Again Before Opening an Offshore Account

America is proactively looking to uncover any American money that has been laundered using Swiss banks. Back in January of 2003, the U.S. Treasury announced that it and the Switzerland would be signing an agreement that will involve the sharing of information for tax purposes. In March 2009, Switzerland agreed to increase their anti-money laundering laws to honor their agreement with the U.S. So now that the 2009 treaty is in effect, account holders of Swiss bank accounts are required to be identified and any transactions that are suspicious must be reported to the Money Laundering Reporting Office.

Criminal charges are also to be filed against the 4,000 or so Americans who had an account with UBS Swiss bank. These account holders will be fully audited and will be liable for tax repayments and penalties, unless they are given leniency by the 2009 IRS voluntary disclosure program. This program has since ended, but Justice Department and IRS are still putting pressure on suspects of UBS and other offshore bank account holders.

Now that the Bush tax cut is nearing an end, the U.S. deficit is mounting, and the pending legislation for a dividend and capital gain tax increase, more and more U.S. citizens are being tempted to open up offshore accounts for their money. Even with all of the risks involved, like imprisonment, large fines, and disclosure threats, some are still risking it anyway.

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