Britain grills Switzerland on bank secrecy

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Swiss parliamentarians have wrapped up two-days of talks with their British counterparts who questioned them about the future of bank secrecy.

The trip by 18 Swiss parliamentarians to London was a qualified success for Swiss Senator, Anton Cottier. “The exchange of information is important. Obviously banking secrecy remains the major stumbling block between our two countries,” he said.

The Swiss delegation also met representatives of the City, Britain’s financial nerve centre. “When it comes to money laundering, the British banks seem to be a lot more liberal than ours,” Cottier observed.

Banking controls

Switzerland has been trumpeting of late its efforts to crack down on dirty money deposited in Swiss banks.

Dina Balleyguier, the head of the Swiss Money Laundering Control Authority, said that as a result of Switzerland’s clampdown, suspicious funds may now be flowing elsewhere, notably to London.

“In all, I think that Switzerland is fighting dirty money efficiently,” Balleyguier told a news briefing in Geneva.

“The proof is that several financial intermediaries (asset managers and bankers) say that with all of the reporting obligations which Switzerland imposes on them, all the questions they are obliged to ask their client, many of the clients have opted to go elsewhere – to London,” she said.

This proved that a client with “something to hide” had no chance of escaping regulators in Switzerland, she added.

Criminal investigations

Switzerland, which houses a third of the world’s $27 trillion offshore wealth, has often been accused of being a haven for money with suspect origins.

However, banking secrecy can be lifted to facilitate criminal investigations into suspect accounts held by the likes of the former Nigerian dictator, Sani Abacha.

The Swiss non-banking or para-banking sector was now “x-raying” clients about the origin of their funds, Balleygueir said. Swiss banks and intermediaries are now required to “know their customer”.

Taxation of interest income

The Swiss parliamentarians also discussed the thorny issue of the taxation of interest income while travelling in London. The topic forms part of the new bilateral negotiations between Switzerland and the European Union (EU).

A delegation of British parliamentarians, on a similar mission, met their Swiss counterparts in Zurich on February 1.

swissinfo with agencies