Business | Banking

Switzerland willing to give up banking secrecy

A report says this can happen before a global standard is established

  • Reuters
  • Published: 13:12 June 16, 2013
  • Gulf News

Zurich: Switzerland should be ready to share data on foreign depositors with the European Union (EU) even before a global standard is established, a government panel said on Friday, a move which would lift the last vestige of its tradition of banking secrecy.

The world’s biggest offshore financial centre, with $2 trillion in assets, is under massive pressure from the EU and elsewhere, as cash-strapped states seek to stop tax evasion and close loopholes.

“The fundamental ideas of the strategy would be that Switzerland takes an active step in the international tax debate,” the commission, led by former top Swiss government economist Aymo Brunetti, said in the report.

The recommendations come shortly before the Group of Eight (G8) leading economies meet next week in Northern Ireland, where tax avoidance is likely to figure on the agenda.

Switzerland has recently come under increased pressure to fall into line with the EU after Austria and Luxembourg said they were prepared to share data on foreign depositors, but Swiss politicians remain deeply divided on the issue

US crackdown

At the same time, the country is also struggling to reconcile its strict secrecy laws with a US crackdown on wealthy Americans using hidden Swiss accounts to dodge taxes.

“The most recent international developments concerning automatic information exchange [AIE] indicate the pressure on Switzerland to adopt a [global] AIE regime is being kept up and even increasing,” the Swiss Bankers Association (SBA) said in a statement.

“Swiss banks are keen to pro-actively negotiate with the EU on expanding the taxation of savings income and a type of information exchange acceptable to the EU,” the SBA said.

Swiss Finance Minister Eveline Widmer-Schlumpf, who was present at the report’s presentation, said the government would review the report and draw conclusions in September.

The report set out conditions for any automatic information exchange agreement with the EU, including access to financial markets. Cooperation should be withdrawn if this access was obstructed, it said.

Stringent rules

Switzerland has accused the EU of being protectionist and fragmenting global markets with new rules that are unfair to countries outside the bloc, including the draft EU law MiFID, which imposes stringent obligations on companies from non-EU countries wanting to do business in the bloc.

“Market access is important and must be a precondition,” Widmer-Schlumpf said.

If an agreement could not be reached with the EU, the alpine nation would continue to work with the Organisation for Economic Cooperation and Development (OECD) towards a global solution, according to the report.

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