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Swiss banking secrecy unaffected by OECD report

The finance minister, Kaspar Villiger (pictured), has repeated that Switzerland's banking secrecy is not a topic for negotiation. He was reacting to a report by the OECD on improving access to bank information for tax purposes.

The finance minister, Kaspar Villiger (pictured), has repeated that Switzerland's banking secrecy is not a topic for negotiation. Villiger reacted on Wednesday to a new report from a committee of the Organisation for Economic Co-operation and Development on improving access to bank information for tax purposes.

At a news conference in Berne, the finance ministry underlined that Swiss law already satisfied the recommendations formulated in the report.

The Swiss Bankers Association said the report implied no substantial changes that would affect Swiss banks and their customers.

The OECD's fiscal committee recommended that all member countries should permit tax authorities to have access to bank information, directly or indirectly. It encouraged such information so that tax authorities could fully gather taxes and exchange information.

There had been speculation that the report might single out Switzerland for criticism because of its banking secrecy laws.

In a statement, the Bankers Association said Switzerland already fulfilled recommendations made in the report.

"It is not possible to deposit money anonymously with a Swiss bank. This is ruled out by criminal law, by banking regulations and by the professional rules of the Swiss Bankers Association which are binding on its members," the statement said.

It added that Swiss bank customer confidentiality rules offered no protection to criminals, nor did they protect anyone committing tax fraud from criminal prosecution.

The chairman of the OECD committee, Gabriel Makhlouf, said the report did not mean the end of bank secrecy.

"The report is quite explicit in recognising the legitimate role that bank secrecy plays in protecting the confidentiality of financial affairs and in maintaining the soundness of financial systems," he said.

However, the report added that banking secrecy towards governmental authorities, including tax authorities, might enable taxpayers to hide illegal activities and to escape tax.

Makhlouf said that while taxpayers were able to operate in an increasingly borderless world, tax authorities had to continue to observe national boundaries.

"We believe that enhanced international co-operation is necessary for effective application of tax laws in this new environment," Makhlouf added.

The report says access to bank information should not be "unfettered" and lifting of bank secrecy for tax administration purposes should always be coupled with stringent safeguards to ensure the information was used only for purposes specified within the law.

Villiger has repeatedly said that Switzerland is prepared within the current framework of its withholding tax and banking secrecy laws to make efforts so that Switzerland does not become a haven for EU tax dodgers.

by Robert Brookes

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