Swiss and British lock horns over banking secrecy

Couchepin and Brown shake hands despite their differences over banking secrecy Keystone

The Swiss economics minister, Pascal Couchepin, has met British ministers in London to discuss Swiss banking secrecy laws.

But the talks revealed that the two countries still remain at loggerheads over the controversial issue.

At the talks, which come ahead of a meeting of European Finance ministers in Brussels, Couchepin was adamant about defending the Swiss position on withholding tax on savings held by European natives in Swiss banks accounts.

The British would like to see reform of Switzerland’s banking laws as soon as possible, but Switzerland does not want to bow to this pressure.

Fierce critic

Couchepin met the British Chancellor of the Exchequer, Gordon Brown, who is one of the fiercest critics of Switzerland’s banking secrecy laws.

“Mr Brown told me that even though it is unfair, Switzerland will be blamed if European Union negotiations don’t move forward,” said Couchepin after the meeting. “This really is unfair because we made a good proposal.”

Following talks with Couchepin, the British Prime Minister, Tony Blair, explained why Britain is keen for Switzerland to agree to a deal.

Concerns

He said that although he understood Switzerland’s concerns, Britain also had concerns.

“It is that as banking develops and particularly in an increasing globalised market we need better systems of exchange of information,” he said.

“We understand Switzerland is very sensitive about this. We’re working hard to resolve this issue optimally before the end of the year.”

Contradiction

Couchepin reacted to this statement by saying that there was a contradiction in the British argument.

“They say changing the system is the natural progression but they want a solution immediately. Why don’t they wait if they expect change to take place anyway? We can wait.”

The Swiss economics minister reiterated that Switzerland will not allow itself to be pressured into changing its laws. He said the European Union had no reason to conclude negotiations on tax directives by the end of the year.

Victims

As the Swiss see it, they are victims of internal EU politics. They say the British also have noted tax havens like the Channel Islands and the Isle of Man.

The British refute the argument that they are trying to protect their own financial interests.

Switzerland claims to have under a third of the global market for the management of the assets of rich people with oversees accounts.

swissinfo, Claudia Spahr in London

in brief

The Swiss economics minister, Pascal Couchepin, has met British ministers in London to discuss cross-border taxation.

Britain and many of its EU partners want Switzerland to scrap banking secrecy, which they say prevents them collecting taxes on EU citizens’ savings income from Swiss bank accounts.

Couchepin argued that a withholding tax on savings income would solve the problem without compromising banking secrecy, which the Swiss say is “not negotiable”.