Do “offshore accounts” slash “Swiss bank accounts” exist in real life in any fashion similar to the way that they exist in TV land?
If so, why/how? I assume every country that has the ability to transfer funds electronically to and from any other country must have some sort of treaty that oversees the mechanics of such.
So why don’t we (and any other country) simply stonewall every other country that refuses to include criminal safeguards in their accounts?
Your assumption is wrong. There are few, if any, treaties regulating electronic transfer of funds. And, even if there were, offshore accounts long predate electronic fund transfers, and regulating electronic transfers would not kill them.
Apart from their obvious use for people/companies invovled in international trade, people who move around a lot, people with interests/assets in more than one country, etc, offshore accounts are mainly attractive for evading tax. Traditionally, countries are not that interested in helping other countries enforce their tax laws, and they are not going to damage their own banking sector in order to do so.
There are international conventions against money-laundering. But they don’t seek to combat it by prohibiting offshore accounts.
Cecil did a column on numbered Swiss bank accounts some time back.
Basically, yes, they exist, yes, they are used. Swiss accounts had legitimate uses.
The problem is not international transfer of funds - funds don’t show up blinking red if it’s drug money or for terrorist operations, it looks like any other money.
The US (and EU countries) have leaned heavily onto Swiss and other “safe havens” (in Europe, Luxemburg and Liechtenstein) to loosen the swiss account silence and cooperate with the tax offices in the other countries / the agencies in the US tracking terrorists and drug money.
The law is of course that the Swiss are an indepent country, can make their own laws as they like and tell the others “Go f*** off”.
In practical reasons, there’s economic pressure, basically the US saying “If you don’t start cooperating with us, we will officially ban all traffic with you, let’s see whose economy hurts first”. So arrangements are made to loosen a bit and give out some information.
As for off-shore accounts: the usual draw of these is that they don’t report money to the US tax office, ideal for rich tax evaders or other shady business. This is usually done by small countries with no other means of industry, but a good technology infrastructure and close to the main centers (hence tropical islands for the US, Luxemburg and Liechtenstein for Europe).
Besides the shady business, these countries often offer lower taxes, drawing a lot of legitimate business using legal loopholes to have their main branch off-shore.
Mixing legal and shady business means that the tax office or authorities can’t simply stop everything but need to seperate carefully.
At least one of the Big Four accounting firms is based in the Caymans… but publicly, they’ll tell you it’s London…
They know a thing or two about taxes (and avoiding them)…
I like the google story about how they move profits around to avoid taxes. Facebook is planning the same thing. It’s all Perfectly Legal.
The problem with forcing the issue - is will the rest of the world go along? Would voters in the US be happy if the government decided to let Germany or Britain tell it how to run its banking? (Maybe they should). So if the USA said “no transfers to Switzerland” then you just send the money to a transfer account in Belgium or Slovenia or Britain. Then what? You try to divide the banking world into “with Us” and “Against us”? A country like France will probably not go along; China has huge American and European ties, which way will they plunk? See how long Walmart lets the issue slide when they have to convert all the accounts payable to Euros cash and fly them to China…? Sorry, you can’t use an American Visa card outside of North America, Afghanistan, and Iraq
The USA can’t just take it’s baseball and go home. If they did, you would find the vast majority of the rest of the world lined up on the principle “you can’t tell us what to do”. They’ve tried to do this over trade with Cuba and wound up with all sorts of silly rules that mostly only hurt Americans.