Breaking the bank?
Has Swiss banking secrecy reached the point of no return?
A US probe into Swiss banks allegedly aiding tax evasion by Americans has claimed its first victim. Switzerland’s oldest private bank broke itself up due to the pressure of the US investigation and others have begun to hand over sensitive data.
Should Switzerland continue to fight its corner or bend to the will of the US?
“Tax haven” Switzerland
Banking secrecy was enshrined in Swiss law in 1934.
France and Germany launched an attack on Switzerland in October 2008 for allegedly helping foreign tax evaders hide their assets.
The country has been under continuous attack over the issue ever since CDs of stolen bank data were sold to various European countries.
The OECD placed Switzerland on a “grey list” of uncooperative tax havens in April 2009. The Swiss were removed in September after renegotiating several double taxation treaties, but have refused to automatically transfer tax information.
The most damaging tax evasion case against Switzerland involved the activities of UBS bank in the US. In February 2009, UBS was fined $780 million after admitting helping US citizens dodge taxes.
In September 2010, the Swiss government agreed to transfer the details of 4,450 UBS clients to the US – in effect violating Swiss banking secrecy to prevent a ruinous court case for UBS.
Switzerland agreed to ground-breaking withholding tax deals with Germany in August and Britain in October that preserve banking secrecy. But the EC has threatened to take Britain and Germany to court if they implement these deals.
The EC insists on an automatic exchange of information as the basis of tax deals with Switzerland.End of insertion
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