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Advisory for those with Citibank Accounts regarding bank secrecy (2014)

mjtfernandez · 3 · 1218

mjtfernandez

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The locally-popular Citibank Mastercard and Visa credit cards are now tools of the powerful US Internal Revenue Service and the Philippine Bureau of Internal Revenue to ferret out hidden wealth and tax evasion of Americans, green card holders and even Filipinos with undeclared Philippine assets and deposits.

 In its latest advisory to its Philippine-based credit card holders and depositors, Citibank informed clients of more stringent regulations on top of those it had already imposed since last year.

 These additional measures include:

 o Blocking any transaction or payment of US citizens and green-card holders that could result in Citibank, its affiliates and even third-party providers contravening the US Foreign Account Tax Compliance Act (FATCA) and any intergovernmental agreement between the United States and any other foreign jurisdiction, the Philippines included.

 In furtherance of such cooperation, Citibank may obtain copies of income tax statements submitted by any bank client to the BIR "and other appropriate sources, including your employer and your accountant."

 o Withholding by the bank, its credit cards and even third-party service providers any amount or applicable tax like withholding, income, value-added or even tax on the sale or disposition of property even without the client's consent.

 The withholdable amount works out to as much as 30 percent, especially on those so-called "passthru payments" made to flagged account holders that do not supply the required FATCA information.

 "You understand that we are not required to contest any demand made by an (government) authority for such payment," Citibank said.

 o Disclosing to any government authority for any audit or investigation even by "prosecuting" authorities personal and account information of banking and credit card clients.

Citibank did not say it but what it meant that it had found a way to effectively bypass the Philippine Banking Secrecy Law since, in the US bank's view, any client's opting to continue his/her financial relationship despite the fine print already constitutes his/her grant of a waiver on confidentiality.

 These personal and account information include basic credit data and negative information, demographic information, monthly account information, profile, performance and history.

 In addition, the client waiver on confidentiality subsists "even after the closure or cancellation of the account/s," Citibank said.

 "Your consent will be effective despite any applicable nondisclosure agreement and you acknowledge that information relating to you and your accounts, including confidential information, may be transferred to jurisdictions which do not have strict data protection or data privacy laws."

 Translation: Citibank can and may share customer data even with the US National Security Agency.

 And if any client is thinking of even suing Citibank for sharing the hitherto confidential information or acting like a government collection agency, the US multinational has already covered itself for any such eventuality:

 "You agree to hold us free and harmless from any liability that may arise from the processing and use of your personal and account information, and other information pertaining to your account/s with other financial and non-financial institutions," the Citibank advisory said.

 Just to be doubly sure, Citibank added the following caveat: "You declare that you have provided any notices, consents and waivers necessary to permit us, our authorized third parties, and our/their third-party service providers and payment infrastructure providers to carry out the actions described in this provision."

 Moreover, "you acknowledge that we will not be required to reimburse you for any amount withheld or deducted by a payment infrastructure provider," Citibank said in no uncertain terms.

 A payment infrastructure provider was identified by Citibank as any third party that forms part of the global payment system infrastructure, including communications, clearing or payment systems, intermediary and correspondent banks.

 No safe harbor

 Worried US citizens and green-card holders who plan to transfer their hidden wealth to non-American deposit-taking institutions will find no safe harbor, either.

 Come July 1, non-US banks and financial institutions are required under the so-called FATCA law to report to the IRS the presence of trigger accounts held by Americans and "those with US Person indicators".

 According to the FATCA briefer prepared by the audit firm PricewaterhouseCoopers,  the indicia of US status include not only US citizenship or lawful permanent US residency status but also a power of attorney or signature authority granted to a person with a US address or even just post-office or "care of" a US address.

 The trigger points for these accounts: $50,000 for personal, $100,000 for joint personal, and $250,000 for corporations.

Citibank, as with all other US financial institutions, will have to report to the IRS the name, address and US tax identification number of the US person/corporation, the account number, the year-end account balance and, the more tell-tale indicator, gross receipts and withdrawals or payments from the account.



Prospera

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^That, to me,  is another piece of  evidence showing how economically strapped the US is at present.

I read a recent article saying that a financial crash worse than that which took place in 1987 is in the offing. If true, I wonder how such an event will affect us here in the Philippines--will it bring about a crisis as well OR give us a window of opportunity? :scratch:


anne_mazing

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alarming! tsk.tsk.  :( thanks for sharing


 


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