Politicians use US trip to defend tax laws
A delegation of Swiss parliamentarians has used a visit to Washington to argue the case that Switzerland is not a tax haven.
The group, led by the centre-right Radical senator Peter Briner, spoke extensively with American congressional leaders urging them not to confuse UBS woes with the entire Swiss financial system.
The trip to Washington was organised over a month ago, before the US authorities pressured the Swiss Financial Market Supervisory Authority (Finma) and UBS to hand over details of up to 300 clients who are believed to have evaded US taxes.
Lucrezia Meier-Schatz, a centre-right Christian Democrat representative, told swissinfo that talks with American counterparts had been an opportunity to point out that the pressure from Washington was unwelcome.
“We pointed out that we were shocked by the political pressure being applied on us in this affair,” she said.
“We also told them that if something happened to UBS, the effects in the US could be more far-reaching than the collapse of the Lehman Brothers bank.”
Meier-Schatz said that while her US counterparts didn’t seem to be obsessed by the topic of tax evasion and UBS, she did want to make them aware of Switzerland’s position.
Not an island
For Amy Klobuchar, a Democrat senator from Minnesota, the matter is not being taken lightly, even if it is not a central preoccupation for American politicians.
“We want people to pay their taxes in the US and it is important for us to ensure this,” she said. “But I will also remind my colleagues that Switzerland is a friend, that we have worked together in the past and we will do it as well in the future.”
The delegation was also at great pains to point out that for the Swiss, their country was no tax haven. The idea is fairly widespread in Washington, leading Barack Obama at one point to support draft legislation in Congress that put Switzerland on a blacklist of tax havens.
“Switzerland is not an island, it is perfectly integrated in the international banking system,” said Meier-Schatz. “This is why we refuse to be on this American blacklist.”
“The government must do all it can to get Switzerland off this list,” she added, a position backed by Briner.
“Anyone who lives in Switzerland knows it’s not a tax haven,” he told swissinfo.
Important trade partners
The members of Congress who met the Swiss delegation had questions about matters besides banking secrecy and tax fraud.
“Switzerland is not just about chocolate and the UBS affair,” said Martin Naville, head of the Swiss-American chamber of commerce. “There are many other aspects to consider, for example that Switzerland and the United States are important trade partners.”
Discussions covered topics such the global economic crisis, the closure of the Guantanamo prison, global warming and cooperation in the fight against terrorism.
According to Briner, there were also questions about the Swiss health insurance system. The Obama administration plans to overhaul American healthcare services and wants to provide insurance for 47 million citizens without cover.
Interest was shown in stronger economic ties. The Americans brought up the need to start fresh discussions about a free-trade agreement even though the project was abandoned just two years ago.
But no one is getting their hopes up for the moment.
“It’s a simple declaration of intent for the moment because the United States has bigger issues to deal with for the time being,” said Meier-Schatz. “Our counterparts indicated that Washington’s priority for the moment is multilateral deals, not bilateral ones.”
swissinfo, based on an article in French by Marie-Christine Bonzom in Washington
Peter Briner, Radical
Lucrezia Meier-Schatz, Christian Democrat
Ruedi Noser, Radical
Thomas Hurter , Swiss People’s Party (rightwing)
Konrad Graber, Christian Democrat
Hugues Hiltpold, Radical
Christa Markwalder-Bär, Radical
Natalie Rickli, Swiss People’s Party
UBS’s dramatic fall from grace started in July 2007, when chief executive Peter Wuffli stepped down following the collapse of the bank’s hedge fund Dillon Read Capital Management.
In October 2007, UBS said it would cut 1,500 jobs in its investment banking arm, including that of its head, Huw Jenkins. Chief Financial Officer Clive Standish left at the same time. Chairman Marcel Ospel stepped down in April 2008.
In October last year, the Swiss National Bank (SNB) was forced to inject SFr6 billion ($5.29 billion) into UBS. A facility was also set up to allow the bank to bin up to $60 billion of toxic assets.
This bailout did not prevent the bank from posting a SFr20 billion loss for 2008. Wealthy clients pulled out $58 billion from the bank in the last quarter alone.
UBS has also been haunted by a US investigation that accused the bank of helping wealthy Americans illegally evade $200 billion in taxes. This month it was forced to pay $780 million in fines and hand over some confidential client data.
But the deal has not completely satisfied the US tax authorities, who have demanded secret data on 52,000 further UBS clients.
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