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Email of January 2, 2012
to Internal Revenue Service Commissioner Douglas H. Shulman, Washington

Dear Sir,

This is to present my compliments at the beginning of a new year and - I trust - a renewal of friendly and mutually respectful and helpful relations between the American and the Swiss people, as reflected notably in the Swiss/American Friendship, Reciprocal Establishments, Commerce, and Extradition Treaty of November 25, 1850 (SR 0.142.113.361) and, more recently, in the Joint Declaration of the US Congress of October 30, 1985.

I've been a long-term observer of relations between our two countries and, in my capacity as adviser of past and current members of the Swiss Parliament, on different occasions, I've been called upon in delicate parallel diplomacy missions involving the United States and third countries, including Iran and the Soviet Union. The topic of this information request concerns a complicated subject where the US Internal Revenue Service is understood to have a perfect deep-draught up-to-date knowledge, i.e. the Qualified Intermediary (QI) system and its application on the background of the US/Swiss double-taxation treaty of 1996 (96 Treaty: SR 0.672.933.61).

The Swiss Parliament is currently in the process of considering both various aspects of the QI system, and an amendment to a previously, in 2010 passed revision ("revision", dated September 23, 2009) of the 96 Treaty. In order to help clarify some related points, I have the honor, on behalf of several Swiss lawmakers, to submit the following questions to your benevolent attention for reply (the responsible commissions are scheduled to meet on January 9, 10 and 31, and in order for your answers, in the event, to be considered in these proceedings, I expect them as soon as possible):

1.    a)  How is the IRS justifying its campaign to hunt down - at disproportionate political, financial and goodwill costs world-wide - suspected treaty shoppers and tax dodgers with an alleged annual loss to the US Treasury in the range of some hundred million dollars, when in fact its QI system's obscured yet real backup withholding part is designed and capable to syphon off revenue streams grosso modo one thousand times larger from the global parallel economy, as revealed and repeatedly discussed at recent sessions of the Cambridge International Symposium on Economic Crime?  Which also begs the supplementary question: If indeed, in the event, the IRS hasn't seen fit to use this system in order to rake in all those hundreds of billion dollars from undelicate and indeed very willing US and non-US persons - and below the radar of all democratic controls at that -, what has kept it from helping to defuse the US debt crisis and to relieve the US economy with those means?
    b)  How much total revenues did the IRS receive from Swiss QIs (notably banks) in each year since 2001 when the QI system became operational,
    -  under the applicable 15% or 30% tax rate for interest, dividends, etc., and
    -  under the applicable 28% or 31% backup withholding rate for securities sales (US and others, "deemed" or otherwise)?

2.    a)  When did the US Congress examine and approve, when did the US President sign and put into effect, the IRS' "Rev. Proc 2000-12" (model QI Agreement) or any of its amendments?
    b)  Why, in the event, was neither necessary, even though the backup withholding on securities sales (US and others, "deemed" or otherwise, initially 31% and later 28%) - whether it is called a tax or not - falls into the exclusive purview and competence of the US Congress (Section 8 US Constitution), and the conditions of the mandatory Administrative Procedure Act (APA, 5 U.S.C. § 702ss) were met?

3.    Where - in the 96 Treaty, in the pending revision of same, in any other related congressional material, and in the Treasury's "Technical Explanation" of the 96 Treaty - is authority granted:
    a)  for requests involving anything but individually and properly identified taxpayers?
    b)  for requests involving anything but administrative procedures available in both countries?
    c)  for requests intended and serving any other purpose than the proper administration of the treaty itself and the "prevention" of - i.e. exclusively in the field preceding, much less enforcing penal norms regarding - "fraud and the like"?
    d)  for nameless group requests for pseudo-administrative but in fact - due to the Swiss/US legal assistance treaty of 1973 (SR 0.351.933.6) - essentially excluded legal assistance in fiscal matters?
    e)  for Swiss nameless group requests for checking, at American banks in the US, whether, e.g., the spirit and the letter of the 96 Treaty is fully upheld, thus honoring the fundamental and time-tested principle of reciprocity?

4.    On what authority and grounds, in the event,
    a)  can a US Senate-approved treaty, like the 96 Treaty, be transgressed by any US entity?
    b)  could the QI Agreement between the IRS and UBS and Credit Suisse, respectively be negociated and placed into which legal status outside the framework of existing US/Swiss treaties?
    c)  could the Swiss/US memorandum of understanding of August 19, 2009 (SR 0.672.933.612) be negociated and signed by IRS Deputy Commissioner Barry B. Shott outside the framework of existing Swiss/US treaties (according to the applicable laws of both the United States and Switzerland, this memorandum - like any other administrative agreement - is understood to be legally binding only within the limits defined in the 96 Treaty; the Swiss Administrative Federal Court, in its landmark decision A 7789/2009 of Januar 21, 2010 thus ruled against delivery of any banking data on the sole basis of said memorandum, declaring this memorandum to be essentially outside the confines of the 96 Treaty)?
d)  could the US/Swiss memorandum of understanding of March 31, 2010 be negociated and signed by Treasury Director Douglas W. O’Donnell outside the framework of existing US/Swiss treaties (the Swiss constitutional lawmakers felt obliged to raise that revised memorandum to the level of a treaty; the US constitutional lawmaker, however, is understood to have never been even invited to consider same, and the US President is not known either for ever having put his signature on this document, for which reason it has not even been raised to the level of an executive agreement and has thus, according to US law, too, remained a purely administrative ukase with no legally binding effect - neither for the Swiss authorities, which thus acted outside the frame of both the 96 Treaty and other applicable laws, nor for US authorities and any affected US person whose privacy rights were thus violated, and who may thus yet benefit from the fundamental rights to which they are entitled)?
    e)  could and should the IRS have sought enforcement of a memorandum of understanding negociated and signed outside the framework of existing Swiss/US treaties,outside of applicable US administrative procedures (e.g. 11 FAM 700, 11 FAM 720, 11 FAM 721.2, notably Department of Justice Memorandum of 25.November 1996 "Validity of Congressional-Executive Agreements that substantially modify the United States' obligations under an existing treaty" by Christopher Schroeder, Acting Assistant Attorney General, addressed to Alan J. Kreczko, Special Assistant to the President and Legal Adviser to the National Security Council), and for which it obtained neither congressional approval nor the Presidential Seal, and which, moreover, in light of applicable conventions, has been invalid ex tunc?

5.    a)  Why should it be in the United States' overall interest to have, in law and in practice, Swiss authorities not to strictly, reliably and with utmost determination respect its own and others' treaty rights, obligations and limits, as it did when other US office holders saw fit to seek to kidnap Marc Rich on Swiss territory, to try to nail the scalp of Swiss banking secrecy to the wall, or to pressure Swiss authorities into extraditing Roman Polanski?
    b)  Why should Swiss authorities accept - be it under genuine or false flags, whether because of real or made-believe hypocritical concerns - to be steamrolled into assisting any US authority in the pursuit of the latter's interests under any circumstance, particularly as long as Switzerland has not on its own, sovereignly and freely decided such a course of action to be in its interests, to be fully in line with its public ordre and to favor its internationally recognised permanent armed neutrality not excluding its traditional courant normal?
    c)  Why, in the event, should Switzerland not recognise and treat its QI bankers and their clients as victims of a bureaucratic conspiracy - and annul forthwith the penal code exemption (art.271) which, since 2001, has allowed its bankers to support, even privilege the US economy through the disproportionally costly QI system, a conspiracy, incidently, which by now involves some 7000 foreigns banks world-wide and which - with its obfuscated, legally questionable and apparently uncontrolled confiscatory backup withholding tax - may be useful to bring a big chunk of the world's annual trillion dollar underground pot back into the "white economy"? Why, in the event, should Switzerland - with a view to help to globally re-stabilise financial markets - not lend a hand to those willing to achieve this very objective of rechannelling marauding underground funds with more mutually beneficial and democratically better controlled ways and means? And why, in the event, should Switzerland not expect the US authorities' full cooperation - i.e. without need to take recourse to corrective and compensatory political and legal actions in the United States and elsewhere - to withdraw forthwith all related administrative assistance requests, to reconsider its FATCA and similar anti-freedom, anti-sovereignty and anti-market plans, and to stop all proceedings against what are seen to be hood-winked and essentially falsely accused Swiss banks and their thus improperly persecuted clients?

Thanking you for your attention, I take this opportunity for extending to you my best regards and New Year wishes.

Anton Keller
Geneva Switzerland
+4122-7400362    swissbit@solami.com

cc: selected members of US Congress

[url: www.solami.com/irsquery.htm]



12.3255 – Motion
Keine Fiskalexperimente ohne Reziprozität
Eingereicht von    Freysinger Oskar
Einreichungsdatum    15.03.2012
Eingereicht im    Nationalrat
Stand der Beratung    Im Plenum noch nicht behandelt

Eingereichter Text
    Der Bundesrat wird beauftragt,
    1. auch formell und für Gruppenanfragen gültig, sicherzustellen
    a) was die Bundespräsidentin am 5.3.12 im NR kundtat, nämlich im DBA 96 sei „die Reziprozität materiell gegeben. Wir versuchen auf der formellen Seite das nachzuholen.“ (www.solami.com/iconoc.htm#record), und
    b) dass diese einseitige Weltneuheit gegenüber allen Vertragspartnern nur bei voller formaler Reziprozität erfüllt wird, und zwar als Ausfluss der völkerrechtlich gleichwertigen Souveränität;
    2.  bei den Schweizer Banken, welche mit der US-Steuerbehörde IRS ein Qualified Intermediary Agreement (QIA) abgeschlossen haben, und bei der IRS in Erfahrung zu bringen, mit welchem Aufwand zulasten der Banken, resp. der IRS, wie viele QI-Steuerrückbehalte der IRS seit 2001 zugeflossen sind
    a) für Zinserträge und Dividenden (15%, resp. 30%), und
    b) für Kapitalschnitte (vom US-Kongress nie bewilligte „backup withholding tax“, früher Schutzgeld für Anonymität genannt, 31%, resp. 28% des Kapitals: …/kingpin.htm#SS);
    3. die sofortige oder graduelle Aufhebung der EFD-Ausnahmebewilligigung zu Art.271 StGB vom 7.11.00 zu prüfen und damit die abartige Vollzugsfunktion der Schweizer Banken am fremdbestimmten QI- und an ähnlich souveränitäts-, ordre public- und interessen-widrigen Fiskalsystemen eigenständig die Rechtsbasis zu entziehen;
    4. die Kündigung des DBA 96 auf den nächsten Termin zu prüfen und allenfalls vorzunehmen, und da die Verständigungs-Vereinbarung von 2009 (UBS-Vertrag) US-seitig nie über den DBA-Rahmen hinaus Rechtskraft erlangte, sind sämtliche ausstehenden Datenlieferungen unter Androhung von Art.267 StGB zurückzuhalten, und die bereits ausgehändigten sind offiziell als unrechtmässig erfolgt zu erklären; und
    5. dem US-Staatsdepartement die Ideen, Hinweise und Fragen vorzulegen, welche zur baldigen Herbeiführung einer nachhaltigen Globallösung der eingetretenen Unstimmigkeiten im Finanzsektor auf der Grundlage des Geistes und der Texte der bilateralen Verträge beitragen mögen (insbesondere die im Namen von Eidg. Parlamentariern dem IRS-Kommissar am 2.1.12 vorgelegten fünf Fragen: …/irsquery.htm). Dahingehend ist auch an ein entsprechendes Schiedsverfahren zu denken. Und es ist an die traditionell freundschaftlichen Banden und beidseitigen Interessen der „Schwester-Republiken“ zu erinnern (…/iconoc.htm#Kopp).

Mitunterzeichner (17)
Aebi Andreas, Amaudruz Céline, Büchel Roland Rino, Bugnon André, de Courten Thomas, Estermann Yvette, Fehr Hans, Flückiger-Bäni Sylvia, Grin Jean-Pierre, Joder Rudolf, Parmelin Guy, Perrin Yvan, Reimann Maximilian, Rusconi Pierre, Schwander Pirmin, von Siebenthal Erich, Wobmann Walter

Originalversion
12.3255 – Motion
No fiscal experiments without reciprocity
Submitteded by    Freysinger Oskar
Date of submission    15.03.2012
Submitted in    National Council
Current status    Not yet debated in the plenary

The Federal Council is requested
   1.  to secure, formally and in ways which will make it valid also for nameless group requests,
a) that which the Federal President explained to the National Council on March 5, 1912, i.e. the double-taxation agreement between the United States and Switzerland of 1996 (96 Treaty) already "provides in effect reciprocity. We are trying to close the formal gap." (www.solami.com/iconoc.htm#record), and
b) that this unilateral commitment - a world's first at that - will be fulfilled in relation with all treaty partners only under conditions of full formal reciprocity, in line with the international public law principle of equal sovereignty;
   2.  to obtain the information, from those Swiss banks who have concluded a Qualified Intermediary Agreement (QIA) with the US fiscal authority IRS, and from the IRS, regarding taxes collected on behalf of and transferred to the IRS, at what costs to themselves and to the IRS,
a) for interest and dividend payments (15%, respectively 30%), and
b) for capital cuts ("backup withholding tax", also known as anonymity protection fee, of 31% or 28% of capital which tax, however, has never been authorised by the US Congress: …/kingpin.htm#SS);
   3.   to examine the immediate or gradual withdrawal of the special authorisation under penal code article 271 granted by the Federal Finance Ministry on November 7, 2000, thus unilaterally withdrawing the legal basis for Swiss banks to divert from their key function of serving and protecting their clients under Swiss law, to favoring and protecting, under foreign law, the interests of foreign tax authorities on the back of their own clients, as has been the case with the IRS' global QI system, and as is planned in other foreign tax systems undermining time-tested sovereignty rules, public order and national interests;
    4.   to examine and, in the event, to abrogate at the earliest possible date the 96 Treaty, and to withhold all remaining data transfers under threat of penal code article 267 persecutions (diplomatic treason) and to officially declare all previously executed data transfers to be illegal and void in as much as their legal basis, i.e. the Mutual Agreement of August 19, 2009 (UBS treaty, as amended March 31, 2010), has never been put into force on the US side and thus could not deploy any legal effect beyond the strict limits of the 96 Treaty; and
    5.   to submit to the US State Department ideas, indications and questions which may contribute to a genuinely negociated, early and lasting resolution of the outstanding finance sector issues on the basis of the spirit and texts of the bilateral treaties (notably regarding the five questions which were addressed to the IRS Commissioner on January 2, 2012, in the name of some Swiss lawmakers: …/irsquery.htm). Consideration may also be given to a corresponding arbitration. All of which should take account and remain in line with the traditionally friendly and mutually beneficial relations between our "Sister Republics" (…/iconoc.htm#Kopp).

Cosignatories (17)
Aebi Andreas, Amaudruz Céline, Büchel Roland Rino, Bugnon André, de Courten Thomas, Estermann Yvette, Fehr Hans, Flückiger-Bäni Sylvia, Grin Jean-Pierre, Joder Rudolf, Parmelin Guy, Perrin Yvan, Reimann Maximilian, Rusconi Pierre, Schwander Pirmin, von Siebenthal Erich, Wobmann Walter