Credit Suisse Holds Firm Against The US

US attempts to strongarm Swiss Banking giants Credit Suisse into giving up the names of American account beneficiaries appears to be stagnating.


Senator John McCain was quoted yesterday expressing frustration at the lack of success by the US who have, in 5 years of trying, thus far only managed to elicit from Credit Suisse the names of some 238 undeclared Swiss accounts held for or by US Beneficiaries.


The Senator reportedly said that the US Justice Department had decided to tackle the issue by filing treaty requests, with little success. About time!


It should be noted as a matter of International Law that the necessary mechanism in order to compel any country to give up the names of non-resident company owners or account holders is to file an application pursuant to a mutually agreed and signed Tax Information Exchange Agreement (which it is noted the US does not hold with the Swiss). America’s use of bully boy tactics to try and force banks and others into giving up ownership information in the absence of such a treaty smacks of disrespect (if not outright contempt) for the rule of law.


If US legislators are so concerned about Americans keeping money offshore in privacy havens one wonders why they aren’t spending time investigating and rectifying the root cause of such motivations that is:


(a)   excess government intrusion into and overregulation of private investment (& business) practices


(b)   a legal system which all but encourages frivolous law suits; &


(c)    consumer concerns about the stability of the American banking/monetary systems etc.


The age old rhetoric of painting anyone who holds an Offshore Company or Offshore Account as a tax evader is starting to wear a bit thin. In my experience (14 years specializing in International Corporate Structuring) the vast majority of Americans looking to set up non-American companies or accounts are motivated to do so by one of the above 3 reasons, not by the desire to avoid taxes.


Full marks to Credit Suisse for standing up to the bully boys.


But that more states/businesses were to show such courage….



Seychelles Credit Rating Rise

Seychelles jurisdictional reputation has received a timely boost with the well regarded Fitch Ratings service confirming that Seychelles’ long-term and short-term foreign currency rating now stands at ‘B’ grade with a positive outlook.


Fitch reportedly attributed the positive outlook to the “strong budget discipline enforced since 2008,” which has led to a tighter control of expenditure, and has increased tax revenues.


There is expected to be a primary fiscal surplus (before interest payments) of 4 percent of gross domestic product (GDP) in 2014 and 2015, and, as a result, Fitch reportedly expects public debt to decline to 54 percent of GDP by 2015, from 70.5 percent in 2012.


Fitch pointed out that “revenue growth under-performed budget plans in 2013, mainly due to shortfalls in value added tax (VAT) receipts and excise revenues. The underperformance of VAT was partly due to lower than projected collection from the tourism sector, some teething problems in the first year of implementation of the new VAT regime, and appreciation of the Seychelles rupee. The fall in excise revenues reflected a decline in imports of motor vehicles and reductions in some excise tax rates.”


However, the agency acknowledged that the revenue shortfall was more than offset by a reduction in expenditure worth two percent of GDP. In Fitch’s view, “this shows the authorities’ commitment to fiscal discipline. Our current judgment is that the authorities will continue to enforce fiscal discipline in a way consistent with their debt reduction target of 50 percent of GDP by 2018.”


“[Our] sensitivity analysis does not currently anticipate developments with a material likelihood of leading to a downgrade. Any reversal of fiscal reforms or relaxation of expenditure control would likely result in negative rating action,” the agency concluded.


With both company incorporation numbers and Foundation registration numbers continuing to grow  rapidly in Seychelles (and competitor jurisdiction’s struggling to match Seychelles privacy and product features) the future looks bright for this tiny Indian Ocean Privacy Haven.