US sends ultimatum to Swiss branches of Hapoalim and Leumi

Banks must either hand over info on American clients or face sanctions.

By ERAN PEER / GLOBES
September 13, 2011 07:23
2 minute read.
bank hapoalim 88 298

bank hapoalim 88 298. (photo credit: Ariel Jerozolimski)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user uxperience almost completely free of ads
  • Access to our Premium Section and our monthly magazine to learn Hebrew, Ivrit
  • Content from the award-winning Jerusalem Repor
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

The US government has set an ultimatum for ten Swiss banks operating in Israel – among them Bank Hapoalim Switzerland Ltd., Bank Leumi (Switzerland) Ltd. and Swiss UMB (Mizrahi-Tefahot Bank subsidiary UMB (Switzerland)) Ltd. – to provide information about their activities in the US, and about the activities of their clients who are American citizens. A number of the banks have already transferred the information. The US is demanding this information by September 23.

For now, only a statistical breakdown of clients is being requested, without their names, and their activities in the US. It is believed that the US will request names of specific clients in the next stage. This request is part of an investigation of tax evasion by US citizens, and in preparation for the Fair and Accurate Credit Transactions Act (FACTA) that will soon take effect.

Be the first to know - Join our Facebook page.


It is believed that the US government will take legal action in an effort to uncover the identity of American clients who are using foreign bank accounts to avoid paying taxes. Credit Suisse Group AG, Julius Baer AG, HSBC Holding Plc., and Basler Kantonalbank AG are among the banks on the list.

Pressure from the US government on this issue is extremely heavy, and it seems that the Swiss government, in an effort to avoid conflict with the US, will allow the transfer of information about activities that occurred after September 30, 2009, if these activities are a direct breach of US law, or are plain fraud.

The Basel-based newspaper The Basler Zeitung first reported the matter.

Bank Leumi said in response, “The Swiss authorities did indeed make a request to ten Swiss banks, including Bank Leumi Switzerland, in an effort to receive general statistical information. Apparently, this statistical information is to form a basis for a comprehensive arrangement with the entire Swiss banking sector between the Swiss and American authorities. Bank Leumi Switzerland is of course cooperating fully with authorities, in accordance with Swiss law, and following legal advice.”

It added, “Bank Leumi Israel and its branches abroad are taking active steps to be fully updated from legislative changes resulting from the implementation of the FACTA.”



Bank Hapoalim said, “The bank cannot comment on Bank Hapoalim Switzerland activity since, as is known, it is a Swiss bank and operates according to Swiss law.”

Mizrahi-Tefahot has not yet responded.

FACTA, a US law that will take effect in January 2013, will require banks worldwide to report on accounts and assets they manage for US citizens, in an effort to collect taxes from them. Any bank that fails to transfer the requested information to the IRS will be subject to sanctions in the US.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS