The Swiss press has spoken harshly of “marching orders”, “suppression” and “worst fears” in reaction to Wednesday’s announced bank secrecy deal with the United States, criticising that crucial details of the accord remain murky.
The front page of Zurich’s Tages-Anzeiger featured a gigantic black cube in front of the Swiss parliament building, meant to represent the “tax deal black box” that Swiss parliament is to vote on in the coming weeks.
The Blick tabloid pointed out that “the Americans are leaving the Swiss in the dark. They will only reveal their exact plans for the banks – and how strict they will be – once parliament has accepted the agreement.”
However, overall, Blick approved of the deal because it didn’t require any financial responsibility on Switzerland’s part. Der Bund in Bern admitted that “no more could have been expected” from the deal.
But the Tribune de Genève didn’t view it as a deal at all, calling it one-sided and stating that Switzerland hadn’t got anything out of it.
“Instead of an agreement, the cabinet is proposing a change in Swiss law that provides only a single virtue: allowing banks to give the US the information necessary to hang themselves.”
Around the world
The news of an accord was splashed across the front pages of many international newspapers as well. Under the subtitle “Breaking the Silence”, the Financial Times pointed out that “Swiss lenders are desperate to remove one of the many tax-related thorns in their sides, even at the cost of high fines”.
The London-based newspaper added that the deal “could help restore any reputational damage to Swiss banks” even if it didn’t “necessarily lead to a surge of business in the US”.
The Wall Street Journal said the deal was a “victory against tax cheats”. It quoted a former assistant US attorney, Jeffrey Neiman, who said: “The Swiss banks are looking to save themselves. It’s no longer in their interest to cater to Americans with undeclared accounts.”
Past and future issues
The Swiss parliament will be presented with two bills in June that aim to deal with existing US tax dodgers and measures to prevent future evasion.
The cumbersomely named “Federal Act on Measures to Facilitate the Resolution of the Tax Dispute between Swiss Banks and the United States” intends to put legacy issues to bed.
If passed, it would allow Swiss banks to furnish the US authorities with more evidence against its tax dodging citizens that already conceal assets in Switzerland.
US prosecutors must still formally ask the Swiss authorities for client names and account details under the existing double taxation agreement between the two countries.
Swiss banks would also be authorised to pass on the names of their own employees that have been involved in US client business.
The Foreign Account Tax Compliance Act (Fatca) will also be on the parliamentary table in the summer session.
Fatca sets down new rules on conducting future business with US citizens by forcing banks and a range of other institutions to name their clients or apply a 30% withholding tax.
Under the Swiss negotiated version banks, securities dealers, insurance companies, trustees, foundation and company administrators would need their clients permission before they could identify them to the US authorities.
Financial firms would be obliged to inform the US tax authorities if it has non-compliant accounts and funds.
The identity of any US account holder that refuses to comply with Fatca’s demands could be tracked down by a request for judicial assistance under the double taxation treaty.
Why the hurry?
The Neue Zürcher Zeitung (NZZ) admitted that the bank industry “should have realised a long time ago that Washington is not playing around” and that an answer needed to be found for relieving the “massive pressure” on Swiss banks.
However, it questioned Finance Minister Eveline Widmer-Schlumpf’s presented solution and asked why the bill was presented so quickly.
According to the NZZ, the haste was explained in official circles by the fact that “the Americans’ patience was running out” and that Switzerland risked “an escalation of further measures” if a solution was not found quickly.
“That amounts to: you are not willing, so I will use force,” the paper remarked, pointing out that the hurry-up fashion in which the bill was presented makes it “impossible” for parliament to reach an informed decision on the issue.
The Basler Zeitung put it even more bluntly: “Widmer-Schlumpf is in such a hurry because she wants to make clear to the Swiss people how shameful, how humiliating, and how miserable the results of the negotiations really are."
Initial reaction from parliamentary members to the proposed accord was lukewarm at best, with multiple political parties debating “returning the political hot potato for cabinet to decide on”, as the NZZ put it.
Only Widmer-Schlumpf’s faction from the centre-right Conservative Democratic Party is said to be ready to vote yes on the proposed solution. Other political players’ concerns range from the bill’s many uncertain factors to the belief that cabinet should not “shove the responsibility onto parliament”, as the centre-right Radical Party wrote in a statement.
The Tages-Anzeiger agreed with the Radicals, stating that “if cabinet still believes it’s in Switzerland’s best interest to give in to the agreement after knowing all the details, then it should do it through its own governance and take responsibility for its decision”.
Awaiting the future
Many papers also pointed out that the future remains unclear for banks, especially those that are not in the group of about 13 institutions that have long been in the sights of US authorities.
Geneva’s Le Tempsremarked that “we cannot speak of an accord because no details are guaranteed by the US”.
The NZZadded that although banks outside the so-called “group one” of targeted institutions could decide freely whether to participate in the accord, “there is currently no information about what consequences they can expect”.
The accord stipulates that Switzerland may send to the US the names of bank employees who are suspected of having helped American clients evade taxes. Upon hearing that news, Thomas Geiser, a professor of workers’ rights at the University of St Gallen, told Blick that “the risk remains that innocent bank employees could be hand-fed to the Americans, unbeknownst to them.”
“Under such conditions, no one will want to work for the banks anymore,” he concluded.