Banking secrecy “has to be explained” to the US
The CEO of the Swiss-American Chamber of Commerce says Switzerland must explain its banking secrecy laws clearly to the incoming US administration of Barack Obama.
Martin Naville tells swissinfo that it is also important for the Swiss to hammer home the message that Switzerland is not a tax haven.
Naville said he did not think much would change under Obama because he had many problems to deal with and limited room for manoeuvre.
But he added that there would be more regulation and protectionism, as the government would play a much larger role in business and life in general.
swissinfo: How will Obama’s election change Swiss-American relations, if at all?
Martin Naville: I don’t think it’s going to change that much. Switzerland is a good partner that is far away. It doesn’t really deal in those most pressing matters that the government of Obama will have [to tackle].
It has some kind of privileged relationship, we’re not important enough and we don’t cause enough problems to be a first priority for the [new] administration.
swissinfo: There has been a trend for decades to bash Swiss laws on banking secrecy, not only in the US but in other countries. How do you think the incoming Obama administration will deal with that issue?
M.N.: I think the issue is not just Swiss banking secrecy. It is really the American taxpayers who have to pay taxes even though they don’t live in the States. The government needs a lot of money because it has a lot of debts and clearly it will go after American non-taxpayers, and a lot of this money is in Switzerland.
But Switzerland has made a lot of progress and we are not in fact a tax haven. Obviously looking at the James Bond films and the Robert Ludlum books we are deemed to be a tax haven, so it’s really important that Switzerland tells the new government exactly what banking secrecy is all about.
swissinfo: Do you think that the issue is still a priority for Obama, even though as you mentioned, he has other more urgent problems to try to solve?
M.N.: Absolutely. He has to try to save the world, international relations, business, home-owners, the sick people and so he has a lot of other priorities before Switzerland and banking secrecy come up on the radar screen. But one of the first priorities is getting more tax money and this is where the Swiss banking might be linked in. I think we have to make a big effort not to have those two topics linked.
It means explaining all the good moves we have made in the past few years and reminding the American government employees, who will be completely new people, of all the good things that Switzerland and America have done together in terms of [combating] money laundering and finding illegal money. Switzerland is a really solid financial location.
swissinfo: How will the election of a Democrat affect how Swiss companies do business in the US?
M.N.: I think it’s not only the election of a government of Obama but [you also have to remember that] two years ago the whole Congress turned Democrat. That means for companies that it will be much more difficult to do business and invest in America as government takes a much larger importance in how business will be transacted.
swissinfo: Switzerland and the US tried to talk about a free trade accord and it came to nothing. What should Switzerland do to try to restart dialogue?
M.N.: I think any effort would be completely moot. The US Trade Representative (Susan) Schwab said publicly ten months ago that there’s no sense in even talking before Switzerland completely reforms its agricultural policy.
With the new government coming in and putting a lot less emphasis on international free trade or bilateral free trade, I think it will be moot to try to start a discussion or even a negotiation under those circumstances.
swissinfo: Will Swiss-American relations be better under a Democrat administration than one led by the Republicans?
M.N.: I don’t think it really matters. We are not on one side or the other of party politics. The Republicans have more renown to be a little better in international business, but let’s say that over the past two years they didn’t quite prove the point.
swissinfo: How will life change for you here at the Swiss-American Chamber of Commerce?
M.N.: I think life is going to be a lot easier. There will be less president-bashing and American-bashing because the one negative symbol of America will be gone by January 20 and there might be some very interesting issues where we can help Swiss and American companies to do better business under the new rules set by the Democrats.
For example, there will be regulations on what banks and pharma companies can and cannot do, protection of employees and pensions funds, additional regulations on health insurance, so there will be a lot of new rules that need explaining and where we might try to give a better view of what Swiss and American companies need to do to comply with those rules.
swissinfo: Usually when there’s a change of party taking over the White House, we see a new US ambassador in Bern. What will be the message of the Chamber to him or her?
M.N.: The message is: forget banking secrecy. Switzerland and America have had a fantastically good relationship for many, many years going back to writing the Constitution and setting up the political system in America; this is why the two countries are called the Sister Republics. We share the same values of freedom, democracy, the right of free speech and so on, so I think it is first and foremost explaining to him or her the many things that are similar between our two countries.
It includes the system of government. We’re the only two countries where the executive is independent from the legislative. And it also includes our work ethics, the hours worked and there’s a lot of similarity in human resource laws. It’s really reminding him or her of all the good things between our two countries to make sure that not only the one or two issues that are hanging in the air really define the relationship. They are the exceptions to the rule.
swissinfo-interview: Robert Brookes
Swiss bank accounts and banking secrecy have featured in many films and novels. Here is a selection:
The Bourne Identity (Robert Ludlum)
Goldfinger, On Her Majesty’s Secret Service and The World is not enough (James Bond)
Smiley’s People and The Day of the Jackal (Frederick Forsyth)
Astérix in Switzerland (Uderzo and Goscinny)
The Saint (Leslie Charteris)
The United States is Switzerland’s main trading partner outside Europe.
Swiss exports reached SFr18. 4 billion ($15.63 billion) in 2007, while US imports totalled SFr9.3 billion.
The US is the main destination for direct Swiss investments.
The two countries in 2006 set up the Swiss-US Trade and Investment Cooperation Forum.
In 2007, the Swiss colony in the United States totalled 73,978 people.
President-elect Barack Obama and two other senators are behind a draft law called the “Stop Tax Haven Abuse Act”, a 68-page document that blacklists Switzerland and more than 30 other countries.
The plans foresee widening the powers of the US economic and finance ministries as well as the Internal Revenue Service (IRS) to investigate and punish tax evasion from countries the US considers tax havens.
One of the sanctions in the text would prohibit all foreign banks involved in tax evasion from introducing credit cards on the US market.
The text includes a list of 34 countries, including Switzerland, which are considered as “probable tax evasion locations” in the eyes of the IRS.
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