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Bank Leumi Media Monitoring 02/24/15

English Language Press - There are no relevant clips to report at this time.

Swiss German Language Press

1. Overview: US-Swiss Tax Dispute

   Feb 24, 2015 | NZZ.ch

   Regarding the broader tax dispute, the media report progress in the relations between Switzerland and Italy

Israeli Press

2. "No One Dreamed that Leumi was Responsible for the Tax Payments of its Clients"

   Feb 24, 2015 | The Marker (Hebrew)

   By Sivan Aizescu
   
   
   “I do not accept the terminology of criminal conduct. The assumption of all banks was that paying tax was the responsibility of the client. No one dreamt at the time of imposing any liability on the bank, let alone the directors, officers and employees”.
3. Depositors in Swiss Banks Can Still Sleep Sound

   Feb 23, 2015 | The Marker (Hebrew)

   By Moran Harari
   
   
   The exposure of the list of over 100 thousand holders of banks accounts at HSBC Switzerland in which there were 6,500 Israelis that held about NIS 10 billion in the Geneva branch is inflaming the world, and rightly so.

Bank Leumi Media Monitoring 02/24/15

English Language Press - There are no relevant clips to report at this time.

Swiss German Language Press

1. Overview: US-Swiss Tax Dispute

   Feb 24, 2015 | NZZ.ch

   Regarding the broader tax dispute, the media report progress in the relations between Switzerland and Italy. Yesterday the countries signed a protocol of amendment to their Double Taxation Agreement. This is viewed as a partial success by Swiss media, but since some critical questions remain unresolved, it is too early to speak of a breakthrough. 

   http://www.nzz.ch/wirtschaft/etappenerfolg-der-schweiz-im-steuerstreit-mit-italien-1.18489263
   

   
   

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Israeli Press

2. "No One Dreamed that Leumi was Responsible for the Tax Payments of its Clients"

   Feb 24, 2015 | The Marker (Hebrew)

   By Sivan Aizescu

   “I do not accept the terminology of criminal conduct. The assumption of all banks was that paying tax was the responsibility of the client. No one dreamt at the time of imposing any liability on the bank, let alone the directors, officers and employees”. So said advocate Ram Caspi, who represents the former executives of bank Leumi, yesterday, in the first discussion of the derivative claims case that was filed against the officers of Leumi in response to the affair in which the bank allegedly helped US tax evaders. The most prominent lawyers in Israel gathered in the Tel Aviv District Court Room of Khaled Kabub for the discussion.

   Caspi claims that part of the agreement that Leumi signed with the US was forced on the bank and with that hinted that the bank does not necessarily stand behind all the admission clauses contained in agreement. This issue is likely to lead the proceedings in the derivative claim case. According to advocate Reli Leshem who represents Bank Leumi, “the bank took commitments upon itself that it will not make claims that contradict the agreement”. According to him, if Leumi contradicts issues to which they are signed in the arrangement with the US authorities in any form, the arrangement will be cancelled. That is to say that the fine will still remain in the hands of the US and the indictment will be drawn up against the bank.

   Therefore the judged pondered on how Leumi could manage proceedings against the officers if it is precluded from asserting claims that are contrary to issues admitted under the arrangement. Kabub asked: “if an employee comes and says that he worked with open knowledge and the directorate approved the activity what will the bank do if it is not allowed to make a claim that contradicts the arrangement”? Leshem replied “it is sensitive and therefore the matter will be examined by a committee of the directorate which has the ability to examine all sides. The sensitivity that the court is describing is one of the reasons that justifies the examination be left to the responsibility of a commission”. The intention is that the commission that the directorate of Bank Leumi is requesting to establish will examine if there is justification to file a claim or reach settlements with the officers of the bank.

   ·        Advocate Amit Manor representing the shareholders that filed the derivative claim stated that the bank missed the boat for setting up a committee, and that the time to do so would have been in 2013, when the letter of request was initially sent. He states that Leshem’s argument actually supports the proceedings being handled by the shareholders, who are not signed on to an agreement with the US.

   ·        Shahar Ben Meir, representing the shareholders of the second derivative claim stated that the time to set up a committee was in 2011 when Maor was first notified of the intention to investigate. As, if she had not been aware of any criminal activity and was notified of it, she should have convened a commission immediately. He stated that the fact that the bank wants to set up a committee is to avoid the suit, claiming that they have something to hide

   ·        Judge Kabub announced that he would give an answer as to whether the commission is approved within fourteen days. The approval of the commission will delay the proceedings by four months. 

   For additional coverage (Hebrew):

   http://www.calcalist.co.il/local/articles/0,7340,L-3653104,00.html

   http://www.news1.co.il/Archive/001-D-361002-00.html
   

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3. Depositors in Swiss Banks Can Still Sleep Sound

   Feb 23, 2015 | The Marker (Hebrew)

   By Moran Harari

   The exposure of the list of over 100 thousand holders of banks accounts at HSBC Switzerland in which there were 6,500 Israelis that held about NIS 10 billion in the Geneva branch is inflaming the world, and rightly so.

   The publications of the details with regards to the amounts that were deposited and the transcripts of telephone calls and secret meetings that were held with the account holders provide a glimpse of a parallel and secret world that was happening right under our noses. The fact is that the list was published very close to the news of the investigation of the “Swiss Bank Affair” that the tax authority in Israel is undertaking and the expensive fine that was imposed on Bank Leumi recently for helping its US clients evade tax, raised the question of whether banking secrecy has come to an end.

   Indeed following the mandate by the G20 the OECD published a report of a new standard in July 2014 regarding the automatic exchange of information relating to financial accounts for tax purposes. Although Israel has still not signed the agreement that will require it to exchange information, it declared that by the end of 2018 it will join other countries in doing so. The new standard is an important milestone in increasing financial transparency and will allow tax authorities to put their hands on money and assets that are escaping tax officers, and even serve as a deterrent against failure to report. With this, an examination of the standard reveals quite a few loopholes to it being an effective tool to attack banking secrecy and eradicate tax evasion.

   ·        The article continues to discuss the different loopholes in the system which include: There are no sanctions against countries that violate its terms; Switzerland, which as mentioned is considered a tax-evasion hub, has announced that it will join the treaty, but with conditions (agreeing to provide information only to some countries); developing countries are not capable of meeting the reporting requirements of the accord; real-estate trust accounts and yachts are not included in the reporting requirements; there would be a bizarre provision allowing countries to forgo receiving information on its citizens (and in the process allowing the countries to declare themselves the ultimate tax havens, where no questions are asked); and worst of all, the Americans are making their own rules for themselves.

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