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Under FATCA , banks, even if they have no represe nta tion in the US, accept re-
sponsibility for their US clients’ tax compliance even if these clients do not inves t
in US markets. FATCA provided a direct regulatory link between the US Internal
Revenue Service (IRS) and foreign financial institutions and is thus an example of
the extraterritorial application of US law. It applies to foreign banks even if they
have no representation on US soil and even if their US clie nts do not invest in US
asse ts (Raustiala 2009). Switzerland, begrudgingly, agreed to change its regula-
tions under pressure from a foreign state and Swiss banks accepted responsibility
for their US clients’ tax compliance. Switzerland signe d FATCA on 14 February
2013, and Liechtenstein followed on 2 April 2014. Kaczmarek and Newman
(2 011) also show that extraterritorial interventions by US courts have the capacity
to change national regulations in foreign countries and that a pplying US law ex-
traterritorially on foreign firms increases the like lihood of the firms’ home country
enforcing their national regulations twentyfold. Before FATCA, Swiss and Liech-
tenste in banks were only interested in practicing the least stringent form of tax
cooperation with foreign governm ent s. Both states were also forced to make sim-
ilar conce ssions to multilateral initiatives, which is focus of paper three.
There were three key events that allowed US law enforcement authorities to use
FATCA to enact change in Switzerland. Firstly, structural economic interdepend-
ence allowed the US to introduce the QI program, which required foreign banks to
repo rt their client’s holdings of US securities directly to US tax authorities ( Grin-
berg 2012). The QI program gave US authorities information on Swiss clie nts and
was the first step towards softening banking secrecy. Secondly , a whistleblower’s
testimony provided US authorities with the legitimacy that was needed to attack
banking secrecy. Former UBS banker Bradley Birkenfeld, whom I interviewed for
this paper, accused UBS of violations of the QI program (Garrett 2014 ). This came
in the wake of the financial c risis and its bank bailouts, burgeoning public defic its, defic its,
