Swiss Secrecy Under Threat? – No!
The media appears to have misread the results of the Credit Suisse case as they did with the UBS case two years ago. Yes, the bank was fined a massive fine in the U.S. but this did not reach back into Switzerland. How come, you may well ask?
Top managers weren’t charged. They were obeying Swiss laws, which may contradict U.S. laws. But Swiss jurisdiction overrides U.S. jurisdiction in Switzerland, just as U.S. jurisdiction overrides Swiss jurisdiction inside the U.S. Nothing has changed on that front.
The bank [Credit Suisse] hasn’t produced the names of U.S. account holders at the heart of the matter. Credit Suisse didn’t have to identify account holders, except those they believed were, indeed, criminals. This could only happen if the Swiss government made it clear to the U.S. that it is not Switzerland that was on trial, just the U.S. branch of Credit Suisse. In Switzerland had any names been revealed, the bank executives involved would go to prison for breaking Swiss Banking Secrecy laws. These laws remain unchanged!
In 2009, UBS avoided prosecution by the U.S. Authorities by paying $780 million, admitting it fostered tax evasion and disclosing to the U.S. the names of 4,500 more account holders. It was clear that the Swiss government considered these criminals as breaking the laws that Switzerland has in common with the U.S. The names of the other 40,500 U.S. clients of UBS with Swiss bank accounts were not revealed nor have been since then, because the Swiss judged them not to be criminals and denied the U.S. demand that they surrender more U.S. account holders. The Swiss were robust in protecting the names of their U.S. clients!
This is consistent with the 300-year history of the Swiss in protecting foreign assets held by their banks even in the Second World War. These assets have usually included gold too.
What has happened since then is that U.S. clients of companies in the financial sector, including vaults, with branches in the U.S. have been asked to take their business away. But there are companies like www.StockbridgeMgMt.com still, that continue to house U.S. client’s gold [with no tax angle] in Switzerland. To us, Switzerland, because of its robust performance in countering invasive tax probes by the I.R.S. etc, over the years as well as now, remains the safest place in the world to hold client’s gold and through companies like Stockbridge and its guardian, the Ultimate Gold Trust S.A. to guard against its potential confiscation in the future.
It was only through tax treaty requests that the Justice Department got names of 238 Credit Suisse customers out of the 22,000 accounts held by Americans, according to a Senate subcommittee report in February.
Singapore, etc versus Switzerland
The main advantages of Switzerland over any other haven for gold or silver, in the world are those detailed above. But for gold and silver owners there is a huge advantage in the markets there. Switzerland has a deep and liquid precious metal market, as well as access to the main gold refiners in the world, where clients can buy and sell “Good Delivery” gold bars at any time, in decent quantities, at almost the ruling price [small premiums if any.
Should any country confiscate its citizen’s gold, no gold market, dealer or Custodian would continue in business thereafter, whereas under the wing of the above company gold owners could continue to own their gold, find a deep liquid gold market on their doorstep and continue to buy and sell at will.
Unfortunately, countries such as Singapore, etc, cannot offer the same tested history or liquid gold markets. As such, we cannot foresee them offering nearly the same protection or market in times when governments rapaciously grab gold in the interests of their nation.
But sad to say, the majority of gold owners believe that provided their gold is held overseas, it is safe from their government’s hands. This is just not the case. Their governments, as history has shown, where this has happened, attack the gold owner not the gold, threatening the gold owner with fines or imprisonment if he does not hand the gold over to the government no matter where it is. So he could hold it in Timbuktu and it would not make a difference.
Gold Storage companies, safe or not?
Gold storage companies with their corporate structure inside a jurisdiction where the government decided to confiscate citizen’s gold would also be forced to hand over their client’s gold, even if that company held the gold in another Jurisdiction or face forced closure, we believe. We feel that it is imperative for a gold storage company to have its structure in a country like Switzerland too. Does yours?
Hold your gold in such a way that governments and banks, etc can’t seize it!
Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Julian D. W. Phillips makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Julian D. W. Phillips only and are subject to change without notice. Julian D. W. Phillips assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage which you may incur as a result of the use and existence of the information, provided within this Report.
Julian Phillips is the Founding Partner of Gold Forecaster - Global Watch and Silver Forecaster [incorporating Platinum]. Mr. Phillips analyzes the gold, silver, and platinum market alongside the macro economic currency aspects of these precious metals. He covers the shares involved in these sectors and publishes numerous articles on specialist websites concerning precious metals. Mr. Phillips is also a specialist in Exchange Controls and international currencies. He has qualified to be a member of the London Stock Exchange. His working life has focused on Gold/Currencies/Fund Management and now Silver and Platinum. Additionally, Mr. Phillips has spent some years in capital creation in currency distressed countries through exchange control incentives. Mr Phillips is also the Chairman of Stockbridge Management Alliance Ltd. a company that offers gold storage in a way designed to prevent its confiscation should such an order be issued in any country. His websites are at http://www.goldforecaster.com and http://www.silverforecaster.com/.