U.S. is becoming new Switzerland

U.S. is becoming new Switzerland

Having no desire to disclose the amount of capital owned, a person could now transfer it not to the Bahamas or the Virgin Islands, but to the United States of America.

Back in fall of previous year, Andrew Penney, a managing director at Rothschild & Co., made a report with a clear-cut message on how to help wealthy clients avoid paying taxes of their assets. The main option voiced by the top manager was to transfer them to the U.S.

As reported by Bloomberg, the U.S. refusal to use new global disclosure standards helps the country creating a new emerging capital market. In other words, the state that has been for years persecuting other states where Americans hide their money starts offering conditions for wealthy people similar to those of the offshore areas.

Andrew Penney has already dubbed the U.S. ‘a tax haven’ whose services are sought for by London lawyers and Swiss trust companies alike, who are helping to move their clients’ accounts from the Bahamas and the British Virgin Islands to Nevada, Wyoming, or South Dakota.

“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal, cited by Bloomberg.

Rothschild has already opened a trust company in Reno, Nev., and is now moving the fortunes of its wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.

Another American state – South Dakota – offers its clients low tax rates and banking secrecy. The latter is key requirement of large capital owners. As stated by Alice Rokahr, the president of Trident company in South Dakota, confidentiality is a key priority of her clients, not tax evasion, and it is offered by the U.S. banks. “I do not hear anybody saying, ‘I want to avoid taxes,’ ” Rokahr said. “These are people who are legitimately concerned with their own health and welfare,” she says.

The Organization for Economic Co-operation and Development (OECD ) drew up stiffer standards to help other countries ferret out tax dodgers. Since 2014, 97 jurisdictions have agreed to impose new disclosure requirements for bank accounts, trusts, and some other investments held by international customers. Of the nations the OECD asked to sign on, only a handful have declined, including the United States. This pushed the U.S. to becoming a second Switzerland, which is now deemed one the world’s major keepers of global banking secrets.