Switzerland moves further to end bank secrecy

30Dec - by The AntiGlobalist - 0 - In News

Swiss banks have had to pay billions of dollars in US fines over the past decade © Reuters

(Financial Times/Atkins) Switzerland wants to update a tax deal with the US next year to allow the automatic, two-way exchange of information about bank accounts between the two countries, a senior official in Bern has said.

The move shows the scale of the rethink on bank secrecy in Switzerland, once famous for helping tax evasion. In a series of high-profile cases, Swiss banks have had to pay billions of dollars in US fines over the past decade after helping clients sidestep tax authorities.

Bern wants to end the country’s reputation as a haven for illicit money and has signed a string of agreements with other countries on the automatic exchange of information. The accords take effect in January.

Implementing globally-agreed standards was “very important for the reputation, competitiveness and integrity of our financial centre — and it is also a factor creating legal certainty”, Fabrice Filliez, deputy head of tax at the Swiss international finance department, told the Financial Times.

Switzerland is the world’s largest centre for cross-border private client wealth management. In recent years, its banks have had to overhaul business models to ensure their clients are fully tax compliant.

US authorities can already receive information automatically about Swiss bank accounts under the US Foreign Account Tax Compliance Act of 2010. But Mr Filliez said Bern wanted to follow other European countries in agreeing arrangements that would permit reciprocal exchange of information.

Such agreements would also allow Swiss authorities access to information on whether Swiss tax had been evaded on money in US bank accounts. “It is a matter of principle and international equality,” said Mr Filliez. “When you commit to something you want your partners to commit to something similar.”

Mr Filliez described the negotiations with the US as “technical” rather than political. If a deal were struck in 2017, legislation would have to be approved in the Swiss parliament the following year before the exchange of information could start.

Swiss bankers privately complain that the US authorities have failed to act aggressively enough to increase transparency in their domestic financial system, allowing exploitation of complex structures, shell corporations and trusts. Mr Filliez said Washington was “fully aware of the problem and trying to make it better”.

His comments came as Switzerland prepares to start implementing agreements on the automatic exchange of information struck with 38 countries, including the 28 members of the EU. Switzerland is not an EU member.

From January 1, information will be collected for authorities in the relevant countries, before being exchanged in 2018.

Switzerland said this month that it had begun consultations on similar agreements with more than 20 other countries including India, Israel and Argentina. The automatic exchange of information builds on governments’ efforts since the global financial crisis of 2008 to boost revenues by ensuring tax compliance.

Mr Filliez said the turning point in Swiss attitudes towards secrecy had been in 2009, when the country agreed to accept international standards on the exchange of information by request.

Switzerland had been slower than other European countries in agreeing such deals. Mr Filliez admitted. He said this reflected Switzerland’s slow-moving, consensus-orientated decision-making, which often ends up with issues being voted on in referendums. “Keeping that in mind, Switzerland has made tremendous progress,” he said.

This year, Switzerland was declared “largely compliant” by the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Read the Original Article Here…