It definitely worked great for a lot of dictators, tax cheats and the sort… I think Switzerland is a great example of why complete privacy isn’t fair on ordinary taxpayers - it allows the ultra-rich to hide what they owe
I'm an American living in Switzerland for over 10 years, and this was definitely my impression as well. But that isn't really the case anymore here - you can no longer have anonymous (i.e. only numbered) accounts, and Switzerland is no longer a preferred locations for dirty money.
FACTA would only apply to Americans and permanent residents right? It isn’t hard to imagine that America is a good place for non-Americans to stash money, but that trick really wouldn’t work for Americans themselves. For example, the Canadian and American housing markets have been a good place to launder dirty or gray Chinese money into real estate.
> A South Dakotan trust changes all that: it protects assets from claims from ex-spouses, disgruntled business partners, creditors, litigious clients and pretty much anyone else. It won’t protect you from criminal prosecution, but it does prevent information on your assets from leaking out in a way that might spark interest from the police. And it shields your wealth from the government, since South Dakota has no income tax, no inheritance tax and no capital gains tax.
Those are trusts with assets and have no relationship to a record of credit events which is what the original post is about. Not to say that the SD laws aren't troubling - they just have little to with eachother.
As far as I am aware, Switzerland had always cooperated with law enforcement requests. Even before FATCA, if your government thought you were cheating on your taxes, all they had to do was present a warrant.
That said, yes, dictators and such were - and are - a problem. They aren't going to prosecute themselves, after all.
By the way, one of the top places unsavory types stash their cash is the US. FATCA is a one way street: US banks don't provide information on their international customers.
> As far as I am aware, Switzerland had always cooperated with law enforcement requests. Even before FATCA, if your government thought you were cheating on your taxes, all they had to do was present a warrant.
The problem was - and this rightfully pissed off a lot of countries - that Switzerland makes a distinction between tax evasion (you "forget" to mention those 5'000 franks extra income) and tax fraud, where you actually cook the books.
Tax evasion is not considered a crime and if you're caught you get fined and pay back taxes. Tax fraud is a crime and may land you ion jail.
So, in case of simple tax evasion a third country may not get the information requested since this is not a crime in both countries, which is a requirement for this.
With the automatic information exchange with other countries Switzerland is no more a prime destination to hide your illicit gains.
Additionally the “international pressure” the OP alludes to is since Swiss banks were the banks of choice international crime, including whichever activity you think might be most heinous.
Prior to 1913 the IRS didn't exist. The US seemed to do just fine before then. Tarrifs are the best way for the government to raise revenues. Especially when you are doing business with hostile countries like China. Please do educate yourself on US history before making such comments about privacy.
It definitely worked great for a lot of dictators, tax cheats and the sort… I think Switzerland is a great example of why complete privacy isn’t fair on ordinary taxpayers - it allows the ultra-rich to hide what they owe