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German banks abandon US customers

The Local · 15 Dec 2011, 08:06

Published: 15 Dec 2011 08:06 GMT+01:00

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According to the Financial Times Deutschland (FTD) newspaper, HypoVereinsbank is the latest financial institution to tell US citizens and all its clients residing in the United States that it is closing their brokerage accounts.

Deutsche Bank already made the move earlier this year and Commerzbank has said it is studying whether to do the same, FTD reported. Elsewhere in Europe, both the British HSBC and Credit Suisse have said they won’t take Americans’ investment business anymore.

None of the banks have said they are restricting Americans’ run-of-the-mill banking activities such as making deposits into normal savings accounts.

That’s because those transactions aren’t yet covered by US regulations that as of the beginning of 2011 have required banks to make detailed disclosures to American authorities about US customers’ security holdings.

The US government has claimed the requirements are meant to make it easier to prosecute Americans trying to dodge taxes on their investments.

But some in the German financial sector think the rules are actually calculated to make it harder for Americans to invest money abroad, thereby forcing them to put their cash in US banks, according to the FTD.

The regulations will only get more complex in 2013 when the US Foreign Account Tax Compliance Act comes into effect. That will require banks to report more information about account holders to American tax authorities, although specifics about what the law will require remain elusive, angering many in the financial services industry.

In any event, German banks have said they’re being forced to invest millions of euros in updating computer systems to ensure their legal obligations are met.

Story continues below…

“This is a tremendous burden on institutions,” a spokesman for the Association of German Banks griped to FTD.

The Local/mdm

The Local (news@thelocal.de)

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Your comments about this article

09:39 December 15, 2011 by bugger
Upon entering American soil, German business travelers and tourists have to pay an entrance fee and are fingerprinted, photographed, x-rayed, interrogated about most private details, and their data stolen from their cellphones and laptops, incarcerated and deported without a reason given and without any legal rights to inquire for the reasons or compensation. It is a sad fact that German companies are forced into such actions as mentioned in the article now, but at least they are the ones who finally act in a bilateral way. The German government which should act reciprocally to the harrassment of Germans traveling to the States, has not lifted one finger so far to protect its citizens towards American arbitrariness which is a very friendly gesture towards American travelers into Germany. American governments should start understanding that there is a world outside their country which does not belong to them and where their laws are not valid. Sadly, the majority of the American public understands nothing at all as they prefer to get their education through talk shows and Hollywood.
09:59 December 15, 2011 by ND1000
@bugger, you are ignorant of your own stupidity. Its fairly obvious that you know little about "Americans" even if you are one which I doubt. There are over 300 million Americans from all over the world. They have different cultures, religions, races, languages, and ethnicities. They are a slice of the whole world combined in one country. For you to cast them all into one basket shows you are little more than an average moron. God help the country you reside in.
10:17 December 15, 2011 by Sastry.M
The Germans belong to an old (G.W.Bush defined) world created with Vedic Revelations as Germany is acclaimed as a second home of Sanskrit studies, while the Americans belong to the New World of mind created Virtual revelations, when Bush foresaw threat to the U.S from WMD's hurled out from hot sand mirages of Iraqi deserts.

Let the Germans and fellow Europeans keep to basic realities and save their virtues to shape their lives by doing the needful free from virtual revelations and speculative financing.
10:43 December 15, 2011 by CensorThis
Maybe they should just buy stolen bank data from hackers?

I personally do not really care for the police states that are popping up in the West and hate to see more and more regulation, but turning this into some Germany vs. America argument is ridiculous given what Germany does to its European neighbors.

How do we know Germany is not already forcing American banks to comply with a similar regulation?

How many others on here feel they grew up in a country that no longer exists? I am an American, but do not think America means the same thing anymore. Europeans think they are democratic, but they are always the first to bend over and hand their rights back over for thoughtless summer days. Everything is a welfare state now adays.
10:59 December 15, 2011 by bugger
Sastry, I have literally no idea what you just said.
14:38 December 15, 2011 by Dizz
@CensorThis, your last paragraph, I hear that more and more. That the hawks are taking your country out from right under your feet. I feel sorry for those who feel that way and as someone on the outside I don't understand how it can happen, especially since your country has built its "brand" on the values of democracy, freedom and the rights of the individual. It would be interesting to hear more from you (or others who feel like you do) about why they think this is happening. If of course you are so inclined.
14:45 December 15, 2011 by frankiep

This is not a Germany vs. America thing. This is about America vs. the rest of the world. In other words, it is about the unbelieveable arrogance of the US as it tries to force just about every financial institution in the world to comply with IRS reporting regulations. I spent a lot of time in the past year researching FATCA and can honestly tell you that there has never been such an arrogant and overreaching regulation in the world.

In a nutshell, any bank anywhere in the world which receives any income, directly or indirectly, from US based sources must provide the IRS with the account statements, account balances, detailed account activity, account history, etc. of all customers who MIGHT be connected to the US either through citizenship or prior residence (i.e. green card holders). Any financial institution which does not comply will be penalized by the IRS withholding 30% (in addition to normal taxes) on all US sourced income which is due to the institution. Compliance doesn't only mean reporting on customers with US ties, but also proving to the IRS that customers are NOT connected to the US. This also applies to companies that are not financial institutions. So any medium sized company which has investments in the US and an American as a board member or majority owner must report the companies financial information to the IRS as well.

As an American I can honestly say that I am glad that so many companies are standing up to the US government and the IRS and telling them to go ---- themselves.
15:00 December 15, 2011 by ATM
I as an American are glad that these banks and institutions are challenging the the US Government and antiquated IRS. Of course the banking policy changes hurts US citizens who want to invest abroad. But the US needs to change its rules.
15:12 December 15, 2011 by Bigfoot76
I remember a story a few months ago about some of the EU airlines no longer flying to the US due to the US Government restrictions. Now banks are starting to close up business with the US as well. It seems the tighter the US gets the more they lose. I just wonder which countries will go on the US watch list simply because they do not want to do business with the US.
15:43 December 15, 2011 by catjones
Or, to put it another way, the german banks are simply too lax when it comes to reporting American investment activities. And, yes, money will have to be spent upgrading to WIN98.
15:52 December 15, 2011 by raandy
ND1000, I totally agree, what a waste of dna
15:58 December 15, 2011 by CensorThis
@frankiep - I am not saying I support these regulations. I just do not see how Germans can say anything about it given the situation with Switzerland.

Most people go along with these laws due to how wealthy citizens get out of paying taxes by hiding money in various places throughout the world. Where was the German outrage over their government paying people for stolen bank data? Even the U.S. does not have the arrogance of seeing itself so far above the law that it could openly buy stolen information from its neighboring countries banks and prosecute it's citizens with that stolen information.

I am not trying to get in a fight over which country is worse. Just maybe there is a problem with how the Western tax system works. Maybe if people somehow paid taxes for things they used and needed vs just throwing it in some lump sum that countries wage uneeded wars with and squander on Autobahn Toll systems that never work this would be less of an issue.

I think it is actually a smart move by the U.S. since it does not harm them at all. Why would they care if U.S. citizens did not have German bank accounts? Germany, China, India and several other countries have no problems setting guidlines for how online companies operate in their countries. This is the global economy that everyone has been dying for isnt it? One big market for everyone to regulate as they see fit.
19:42 December 15, 2011 by carlm
Just another example of the decades long erosion of our constitutional liberties by our increasingly kommie government. The founding fathers intended the individual to have precedence over the government through the constitution and it's guarantee of individual liberty through limited government. Over the last century only presidents Harding, Coolidge and Reagan made any attempt to fulfill their oaths to uphold and defend the constitution. The courts and legislature have been worse. And now we have komrade Odumbo, the worst of all time, though quite popular in Europe.

And so our country has moved so far left it's no better than Europe and our living standard is fast approaching Europe's. We too will be broke, just a few years after Europe.

Is it God bless America, or is it God damn America - God damn the US of KKKA?

20:52 December 15, 2011 by OkieinBerlin
@carim, what country are you talking about? because the US congress and supreme court are harder right these days than they ever were in the 20th century. and that goes especially for renquist's supreme court, the hard right court that has happily handed the democratic process to whatever entity can

spend the most money. this hard right condition has been 30 years coming, since your beloved Reagan, and this no-tax, give-the-rich-more current sad condition of the political system is the product of that hard right movement.

you've gotta argue better -- your lame leftie-commie-bashing just doesn't work anymore --- it's 20 years out of date now. nobody buys it any more. and your argument about individual liberty, limited government and the constitution doesn't make any sense either.

the founding fathers, remember, dumped the nation's first constitution, the articles of confederation -- because it didn't give the federal government enough power. a popular uprising in massachusetts proved that point -- you should know that.

and if your country makes you so sick that you publicly damn it, get the hell out. have some convictions and live somewhere. you won't be missed.
06:03 December 16, 2011 by BeeHive
You have your way. I have my way. As for the right way, the correct way, and the only way, it does not exist.
12:20 December 16, 2011 by mos101392
Whether you call it taxes or any other name,,,it amounts to someone else's hands going in your pockets and justifying it by throwing some regulations or laws that some other entity created. I agree that some form of taxes need to be paid but I am against governments creating new laws at "their" whim whenever they want to "steal" more of my hard earned money.

Unfortunately I have no control where my taxes are spent, Iraq, Afghanistan, Korea, Japan, Germany, Italy, England, Spain.....ect, ect. I have no control when my taxes are spent in foreign countries to employ foreigners on US bases or given to foreign landlords to pay their already overly high rentals to American citizens.

Maybe there needs to be a private club made up of people who feel safer banking their money on an artificially made floating island somewhere in the Mid Atlantic or Pacific, (neutral waters), where no nation can get their greedy hands on it.

I'm no where near wealthy but am feeling more and more like I am losing control of what I can and cannot do. Maybe it's better we all go in a coma like in the movie Matrix and they can completely control every aspect of our lives. Maybe going off grid and moving to the jungles of south America is the answer. Wish they would just go away!!!
12:45 December 16, 2011 by Deutschguy
The resistance of German banks for fuller transparency and reporting will protect those who wish to hide income and pay their fair share of taxes. These fat cats they are protecting already bully their way through a country's respective legislative bodies for weakened regulations, unwarranted write-offs, special exemptions, etc., with political campaign contributions and fake "charities".

The movement of capital through global networks requires global monitoring and reporting standards. That said, I understand why segments of European culture fear government reporting, as it reminds them of secret police.

However, if I'm going to pay every penny in taxes that I owe, then every fat cat and corporate entity has to do the same. Otherwise, the services I expect to receive and be dispensed from government are starved into inefficiency and poor quality.

Personally, I want every corporation, bank, private and public, hedge fund, and sovereign wealth fund to be subjected to total transparency and reporting requirements. I want my US taxes to further strengthen regulatory bodies with adequate personnel, technology, and constitutional punishments for violators.

It is the only way for ordinary citizens to counter the corporate behemoths who rob us of democracy and a level playing field in legislative and judicial decisions.
12:49 December 16, 2011 by Sastry.M
@ bugger-#5, The Vedic (Sanskrit- Ved= Ger. Wissen=to know) revelations pertain to ground realities of relativistic creation. Both gross material world in general and highly evolved subtle conscious minds of human beings in particular, are but part of natural creation.

What I meant in my comment is that every one tries to conjure one's mental picture to suit his/her intended outlook, but need not rationally conform to practical concerns of other people. For example GW Bush graciously accepted German support under NATO in Afghan operations but condemned Germany and France as Old World nations of out dated outlook when the both denied their support for Iraqi war.

As to the modern New World Mind Visions and outlook recall the last two sentences of your comment vide #1 and kindly try to follow #3.
23:42 December 16, 2011 by dirving71
As an American, I can say for sure many Americans know the current economy "recovery" is a farce and they are taking steps to protect themselves. The American government is trying to stop this by forcing its citizens to invest their money into the megabanks that the Federal Reserve supplies with worthless paper (or money). The goal is to force every citizen to pay for the losses the banks have suffered by transferring the wealth of middle class citizens to the people running Bank of America, JP Morgan Chase, Citibank and their ilk through inflated cost of living and a deflated currency. Our government is as draconian and corrupt as they come. There is a special place in hell waiting for these scumbags.
00:47 December 17, 2011 by EinWolf
As more Americans flee AmeriKa, the police state, the US gov't tightens the screws. Seriously, does anyone still believe that the US is the home of the free?
17:51 December 21, 2011 by humanporkrind
I agree with Germany and the rest of the world. Why should they bend to our American laws. Look at our economy and the way things are ran here in the US I wouldn't follow them either.

@EinWolf you are right, it is not free anymore. It is home of the rich and the laws cater to them.
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