SECRETARY KERRY'S REMARKS AT THE U.S.-EU ENERGY COUNCIL

FROM:  U.S. STATE DEPARTMENT 
Remarks at At U.S.-EU Energy Council
Remarks
John Kerry
Secretary of State
European External Action Service
Brussels, Belgium
December 3, 2014

Well, thank you very much for that, Federica. I’m delighted to be here with the high representative and pleased to be in the company of Vice President Sefcovic and Commissioner Canete and Vice-Minister De Vincenti. I’m glad to be back here in this room where we’ve had a couple of meetings already. Last year we were here and we had a good session.

I am not accompanied today by Secretary Moniz. This is not the secretary of energy. He is the acting assistant secretary of energy, and I don’t know how he got here and Moniz did not. (Laughter.) But Secretary Moniz’s flight was canceled, and so he’s gone promptly to the President and he’s asked to be secretary of transportation instead. (Laughter.) Unfortunately, he couldn’t make it, and I’m sorry for that, because as good as the assistant secretary will be, he really knows his stuff, and frankly, he’s got enormous expertise so he will be missed.

But I’m pleased to be here with all of you, and let me begin by applauding the tremendous leadership of the EU in helping to reach a gas deal with respect to Ukraine. That is a very important deal, and it is very successful with respect to the long-term situation. It’s important. And part of our meeting today is really to talk about providing a sustainable energy plan for Europe – for actually more than Europeans – so that all of us can deal not just with issues like climate change, but the economy and the stability of the economy and the stability of the supply. And obviously, it’s not a good idea to depend anywhere in the world on one source. There are disruption and vast implications.

We support major U.S.-EU energy sector reform. That’s part of what we’re going to talk about here today. We think there can be increased domestic production. There’s much to be done on energy efficiency. There’s also an enormous amount to be done in the transformation to a clean energy economy. In fact, the clean energy economy represents the single largest market in the world. And the market that made America particularly wealthy – and I say that advisedly and measured against the 1920s when we didn’t have income tax and people made a lot of money – we actually saw more people make more money in the 1990s from a $1 trillion market that had one billion users. It was the high tech market. The energy market that we are looking at today globally is a $6 trillion market today with 4 to 5 billion users today, and it will rise to some 9 billion users over the course of the next 30 years. It is the largest – you can call it the mother of all markets if you want. And its future is not in coal unless somebody can figure out how to burn it absolutely cleanly. Its future is going to be in clean energy.

So that’s what we’re here to talk about. We want to, obviously, deal with the question – a more prosaic question of how we deal with Ukraine, how we deal with the energy demands of the moment to get through a certain crisis. We want to talk about long-term energy security, which depends on investment in the future. We clearly want to meet our responsibility with respect to climate change. The United States has tried to exhibit leadership together with China as a beginning, as a first step to lay some markers down to encourage people to make the most out of Lima in the next days, and then to make the most out of Paris next year. Because it is clear from all of the scientific evidence that we are behind where we need to be, and catching up is not easy.

So this is our challenge. Technology and our collaboration within the technology sector could be an enormous kick-start to both of our economies and obviously bring us all long-term stability and significant rewards.

I’d just close by saying that I’ve been in public policy now most of my life, 30 – almost 30 years in the U.S. Senate, and now serving as Secretary, and before the Senate, lieutenant governor of a state. I’ve seen many, many debates over public policy issues, and many of them present you with a tension. There’s an up and there’s a down, and you try to fight your way through that tension. When it comes to energy choices, I have never seen an issue that presents as many upsides and as little downside.

People keep saying, well, it’s going to be too expensive to do this, or this may dislocate the economy. It’s just not true. The fact is that the benefits to health, the benefits to – the benefits to health, the savings of hospitals and hospitalization for particulate-imbued diseases or other enhanced diseases as a result of breathing capacity, the enhancement to the environment, the preservation of long-term environment, the diminishment of carbon dioxide, the diminishment of the damaging effects of acidification on the oceans and the impact that is incalculable on species, on coral reefs, on spawning grounds – I mean, you could run the list – the impact on energy security for nations, the lack of conflict as a consequence, the impact on populations that don’t have to move – all of these things are key.

So when you add it all up, the pluses of what we’re talking about here today are just enormous, and we hope that that becomes more and more self-evident as we go forward. And Federica, thanks for hosting us. We appreciate it.

PRESIDENT OBAMA'S MESSAGE TO SENATE ON NEW TAX CONVENTION WITH POLAND

FROM:  THE WHITE HOUSE 

Message to the Senate -- Transmitting a Tax Convention with Poland

TO THE SENATE OF THE UNITED STATES:

I transmit herewith, for the advice and consent of the Senate to its ratification, the Convention between the United States of America and the Republic of Poland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed on February 13, 2013, at Warsaw (the "proposed Convention"). I also transmit for the information of the Senate the report of the Department of State, which includes an overview of the proposed Convention.

The proposed Convention replaces the existing Convention, signed in 1974, and was negotiated to bring United States-Poland tax treaty relations into closer conformity with current U.S. tax treaty policies. For example, the proposed Convention contains provisions designed to address "treaty shopping," which is the inappropriate use of a tax treaty by residents of a third country, that the existing Convention does not. Concluding the proposed Convention with Poland has been a top priority for the tax treaty program at the Department of the Treasury.

I recommend that the Senate give early and favorable consideration to the proposed Convention and give its advice and consent to its ratification.

BARACK OBAMA

SWISS BANKER PLEADS GUILTY TO CONSPIRACY IN U.S. TAX EVADER CASE

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, March 12, 2014
Swiss Banker Pleads Guilty to Conspiring with U.S. Tax Evaders, Other Swiss Bankers and Bank Management
Defendant Helped U.S. Customers Conceal Assets in Secret Swiss Bank Accounts and Tax Havens

Andreas Bachmann, 56, of Switzerland, pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS) in connection with his work as a banking and investment adviser for U.S. customers.

Deputy Attorney General James Cole, Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, Acting U.S. Attorney Dana J. Boente for the Eastern District of Virginia and IRS-Criminal Investigation Chief Richard Weber made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee.

“Today’s plea is just the latest step in our wide-ranging investigations into Swiss banking activities and demonstrates the Department of Justice's commitment to global enforcement against those that facilitate offshore tax evasion,” said Deputy Attorney General Cole.  “We fully expect additional developments over the course of the coming months.”

Bachmann was charged in a one-count superseding indictment on July 21, 2011, and faces a maximum penalty of five years in prison when he is sentenced on Aug. 8, 2014.

In a statement of facts filed with the plea agreement, Bachmann admitted that between 1994 and 2006, while working as a relationship manager in Switzerland for a subsidiary of an international bank, he engaged in a wide-ranging conspiracy to aid and assist U.S. customers in evading their income taxes by concealing assets and income in secret Swiss bank accounts.

As part of that conspiracy, Bachmann traveled to the United States twice each year to provide banking services and investment advice to his U.S. customers.  As a matter of practice, prior to traveling to the United States, Bachmann notified his executive management, including the head of the subsidiary’s private bank in Zurich and the chief executive officer of the subsidiary, of the planned trip and its objectives.

Although Bachmann had been informed of limitations under U.S. law on his ability to provide investment advice to U.S. account holders regarding U.S. securities, the highest ranking executive at the subsidiary was aware that Bachmann was violating U.S. law.  According to the statement of facts, Bachmann was effectively told by the chief executive officer for the subsidiary, “Mr. Bachmann, you know what we expect of you, don’t get caught.”

According to the statement of facts, Bachmann also engaged in cash transactions while traveling in the United States.  In the course of arranging meetings with U.S. customers, some clients would request that Bachmann either provide them with cash as withdrawals from their undeclared accounts or take cash from them as a deposit to their undeclared accounts.  As part of that process, Bachmann agreed to receive cash from U.S. customers and used that cash to pay withdrawals to other U.S. clients.  In one instance, Bachmann received $50,000 in cash from one U.S. customer in New York City and intended to deliver the money to another U.S. client in Southern Florida.  Airport officials in New York discovered the cash but let Bachmann keep the money after questioning him.  The client in Florida refused to take the money after the client learned about the questioning by New York airport officials, and Bachmann returned to Switzerland with the $50,000 in cash in his checked baggage.  Bachmann advised the executive management of the subsidiary about the incident with the cash.

Bachmann also understood that a number of his U.S. customers concealed their ownership and control of foreign financial accounts by holding those accounts in the names of nominee tax haven entities, or structures, which were frequently created in the form of foreign partnerships, trusts, corporations or foundations.

Bachmann dealt with Josef Dӧrig, a co-defendant, regarding the formation and/or maintenance of structures for U.S. customers, among others.  In approximately 1997, the international bank instructed Dӧrig to form his own company specializing in the formation and management of nominee tax haven entities because it was “too risky” to have Dörig perform that work from inside the international bank.  The international bank then directed the subsidiary and others to use Dӧrig and his Swiss trust company, Dӧrig Partner AG, as the preferred choice for the formation and management of structures.

This case is being investigated by IRS-Criminal Investigation.  Assistant U.S. Attorney Mark D. Lytle and Tax Division Trial Attorneys Mark F. Daly, Nanette L. Davis and Jason Poole are prosecuting the case.