All over the world banks are closing investment and bank accounts with U.S. clients. As a bank official states, "Since the U.S. is desperate to get any kind of
revenue possible, because things are tough there and they're running
huge deficits, this is one of their ways: to make American citizens
either pay huge fines or repatriate the money back to America."
I am afraid that this is just the beginning of pressure the U.S. will apply to foreign banks. It will become very difficult to have a bank account outside of the U.S. if you are a U.S. citizen, and it is difficult to live outside the U.S. without one. I would expect there will be banks that will accept U.S. accounts on the condition that all transactions will be subject to review by the IRS. There are thousands of expats working abroad and they will need to have bank accounts.
Hat tip to Michael for this article.
Excerpts from Haaritz.com;
Obedient to intensifying U.S. government pressure to
crack down on offshore tax evaders, in January Israeli banks began
ordering clients they identify as "Americans" or "U.S. tax residents"
to close investment accounts they hold in Israel. It is apparently an
anticipatory measure, ahead of changes in U.S. law. Local banks are
apparently responding to changes in American regulations as their legal
counsels interpret them.
"If we do not receive your instructions by March 16, 2010, we may liquidate the securities in your account," Mizrahi warned.
Local finance professionals agree that the situation is likely will evolve as the Americans develop and implement new banking guidelines, but differ in their assessment of the possible consequences for U.S. citizens living in Israel.
Americans in Israel are left with "with very few
options," added Philip Braude, CEO of Beit Shemesh-based financial
planning company Anglo Capital Limited. His suggestion: "Take the money
back to America. If you're an American you should be investing in
America." He agrees that the current situation is murky, with Israeli
banks aiming to avoid conflict with U.S. authorities.
"Israeli banks have branches in the U.S. and they know [the U.S.] would make it very hard for them to operate if they don't give them the same information that UBS gave them," Nir Amikam, head of research at Wareham Investment Bank, told TheMarker. "I don't know if it makes economic sense, I guess it depends on how much money [Americans have in Israeli banks]," he added. "The banks are probably thinking that it's not as much as they themselves are making by having branches in the U.S."