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Credit Suisse seeks tax evasion sentence delay

Credit Suisse has asked a US court to delay sentencing in its tax-evasion case as it seeks a way to continue managing pension funds worth billions of dollars.

Published: 10 July 2014 13:07 CEST

Credit Suisse seeks tax evasion sentence delay

Photo: Emmanuel Dunand/AFP

The bank is requesting an administrative exemption from the Labor Department that would allow it to continue managing the funds despite having been found guilty on criminal charges of aiding tax evasion.

Department rules bar asset managers from managing pension plans if they have been convicted of certain crimes, including tax evasion.

In a court filing on Tuesday the bank said it needed more time before sentencing to obtain the exemption.

Credit Suisse pleaded guilty on May 19th to having helped thousands of wealthy Americans for decades hide money in offshore accounts to avoid paying taxes.

The bank was fined $2.6 billion for what prosecutors called a "brazen" record of breaching US law.

The US District Court initially scheduled sentencing for August 12th, but Credit Suisse asked the court to push the date until November 1st or later to give the Labor Department more time to approve the exemption.

At risk is Credit Suisse's continued management of more than 100 pension plans worth several billions of dollars of assets, the filing said.

The bank noted that the US Justice Department does not oppose a delay in sentencing.

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Is it easy for a foreign resident get a loan in Switzerland?

Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site comparis.ch

Holders of other, temporary or conditional permits are not accepted.

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

READ ALSO: Does having a good credit score matter in Switzerland?

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.

READ ALSO: Why are Americans being turned away from Swiss banks?

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