Switzerland should not act alone against tax havens

The Panama Papers, leaked from the Panamanian law firm Mossack Fonseca, revealed that 1,339 Swiss lawyers, financial advisors and other middlemen had set up more than 38,000 offshore entities over the past 40 years Keystone

Switzerland must not go to war on its own against offshore tax havens in the wake of the Panama Papers scandal, the lower chamber of parliament has agreed. It prefers concerted action with other countries and wants to see the results of existing measures.  

The House of Representatives on Thursday rejected two motions and two parliamentary questions, supported by the leftwing Social Democrats and Greens, which had called for financial transactions towards offshore havens to be taxed and for tougher laws on so-called letterbox or domiciled companies. 

The Panama Papers, leaked from the Panamanian law firm Mossack Fonseca and published in April 2016, listed the activities of global banks and financial intermediaries on behalf of wealthy clients. The records date back 40 years, containing information on more than 210,000 companies set up in 21 tax haven jurisdictions. They have led to numerous investigations in countries around the world. 

The papers revealed among other things that 1,339 Swiss lawyers, financial advisors and other middlemen had set up more than 38,000 offshore entities over the past 40 years. These entities listed 4,595 officers – or administrators – also connected to Switzerland. 

In October 2016, the Federal Tax Administration revealed that 450 individuals and companies in Switzerland were connected to the Panama Papers. Whether offshore accounting was used to hide money from the tax authorities was unclear. 

Despite subsequent criticism of the secretive offshore financial world, Swiss Finance Minister Ueli Maurer has said on record that Swiss law does not need changing regarding the regulation of offshore entities.  

On Thursday, Maurer reminded Social Democrat Philipp Hadorn that he does not have the competence to check whether Swiss financial intermediaries violated Swiss law in their business dealings with Mossack Fonseca. This would essentially be the responsibility of the Swiss financial regulator, FINMA, he said.