------ Forwarded Message > From: Sardar <sar...@spiritone.com> > Date: Wed, 2 Sep 2009 20:24:03 -0700 > To: Sardar <recon1968br...@yahoo.com> > Subject: Oldest Swiss Bank Tells Clients to Sell U.S. Assets or Leave - > Bloomberg.com > > Oldest Swiss Bank Tells Clients to Sell U.S. Assets or Leave > > Share | Email | Print | A A A > > > By Warren Giles > > Sept. 2 (Bloomberg) -- Wegelin & Co., Switzerland's oldest bank, is telling > wealthy clients to sell their U.S. assets, or switch banks, because of > concerns new rules will saddle investors with tax obligations in the world's > biggest economy. > > U.S. proposals to extend reporting requirements for banks whose clients buy > American stocks and bonds coupled with estate tax liabilities that may be > inherited by the heirs of people who have such holdings prompted the advice > from the St. Gallen, Switzerland-based bank, said Managing Partner Konrad > Hummler. > > "We came to the conclusion that it's a threat to our clients," Hummler, who > is also president of the Swiss Private Bankers Association, said in an > interview yesterday during a conference in Zurich. "It's also a threat to us > as a bank because as a custodian we are an executor to the estate. We find > this aspect discomforting, so we recommend selling all American securities > whatsoever." > > Hummler said he plans to raise the subject today at a meeting of the Private > Bankers Association, which counts Pictet & Cie., Lombard Odier & Cie. and > Mirabaud & Cie. among its members. Swiss banks, which manage $2 trillion, or > 27 percent, of the world's privately held offshore wealth, are struggling to > protect bank secrecy after the government agreed to hand over the names of > 4,450 UBS AG clients to U.S. tax authorities. > > Hummler said he wouldn't ask other association members to follow Wegelin's > lead. Wegelin, founded in 1741, manages more than 20 billion Swiss francs > ($18.7 billion) in client assets. > > "Every member is free to decide and act on their own," he said. > > HSBC Studies > > Alexandre Zeller, head of HSBC Holdings Plc's private bank in Switzerland, > said his company is still studying the new rules for qualified > intermediaries and will do everything it can to comply with them. > > "Often in these agreements you have to understand how this will be applied, > and it would be premature, especially for an international bank, to take > such a decision," he said today, referring to Wegelin's position. "It's not > on the agenda for the moment." > > The U.S. has proposed increasing reporting and oversight requirements for > so-called qualified intermediaries -- foreign banks that withhold taxes on > behalf of the Internal Revenue Service. In addition, new rules may mean that > people who spend limited periods of time in the U.S. acquire tax > obligations, including estate taxes, creating an unacceptable risk for > Wegelin's clients, Hummler said. > > If a client decides to keep his U.S. investments, "then finally he has to > change banks," Hummler said. > > "We're talking about probabilities," Hummler said. "My responsibility toward > clients has to include any kind of probability, and if I see a real threat > then we have to act." > > U.S. Alternatives > > Wegelin is finding alternative ways of investing in the U.S. that won't > impose reporting requirements on the bank or tax liabilities on clients, > Hummler said. > > "The good thing is that in today's world you can build up U.S. exposure in > equities and as well in bonds through derivatives and index funds and so on, > so we are switching to a European-made American exposure." > > Germany and France have also sought to weaken Swiss secrecy laws as they > crack down on tax evaders. > > The French government, which signed a double-taxation treaty with > Switzerland on Aug. 27, obtained the names of 3,000 people suspected of tax > fraud and holding accounts at three Swiss banks, French Budget Minister Eric > Woerth, said Aug. 30 in an interview with the newspaper Journal du Dimanche. > > "It's not credible," Hummler said. "The U.S. had a hard time getting these > 4,450 names, then the French come and say we have 3,000? I cannot believe > it, but they're trying it on." > > To contact the reporter on this story: Warren Giles in Zurich at > wgi...@bloomberg.net > > Last Updated: September 2, 2009 10:46 EDT > > a.. Delicious > b.. Digg > c.. Facebook > d.. LinkedIn > e.. Newsvine > f.. Propeller > g.. Yahoo! Buzz > > > > > http://www.bloomberg.com/apps/news?pid=20601109&sid=aJstU9MVcYSg
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