CaptainKickback wrote:It would be interesting to know if that was just marketing fluff, or if it was vetted by their in house attorneys and Compliance Department. Or were the Marketing people going off the reservation.
It was marketing fluff that was also thoroughly vetted by compliance.
The mentality of Swiss bankers works generally like this:
"We want foreigners to place their deposits with us. What makes our little neck of the woods attractive to foreign investors is that our government is very private--so private, in fact, that it doesn't like to cooperate with the tax divisions of foreign countries (even though the Swiss have entered into dozens of tax treaties with foreign countires in which they promise to share information of various kinds).
"Therefore, our best way to attact investors is to market our accounts this way: 'Invest with us! We don't ask questions! What's more, we do not expect the tax authorities of other nations to ask questions, either!'"
The compliance department looks over the marketing and says, "Well, we're not LYING. We honestly don't expect that these accounts will end up getting anyone in trouble. We're not saying this necessarily because we think we'll get away with illegal activity. We're just saying we don't expect anyone to get in trouble, regardless of the reason they don't get in trouble."
So they market the accounts, stating in general, "We at UBS think it is more likely than not that your account will not be subjected to tax in [name non-Swiss country here]."
They don't say, "If you're looking to squirrel away drug money, this is the place!" They also don't say, "The IRS will NEVER be able to get a hold of your name, so if you're looking to cheat them, this is the place!" They just say, "We do not expect these accounts to be taxable in the U.S."
So these accounts are favored by drug cartels and tax fraudsters, even though they are not directly marketed that way.
But it still doesn't follow that everyone with an account like this is a criminal. Lots and lots of people with these accounts inherited them, having no idea that they were illegal in any way. These people are scrambling right now to make voluntary disclosure to the IRS to avoid criminal liability. And well they should: if they inherited a foreign account and had no idea it was illegal, they aren't criminals--they still owe back taxes and maybe civil penalties and interest, but they aren't criminals.