Villiger rebuffs EU attack on Swiss banking secrecy

Kaspar Villiger says the EU push to weaken Swiss banking secrecy laws would provoke a "capital flight to the far east" Keystone

The Swiss president, Kaspar Villiger, has hit back at European Union criticism of the country's banking secrecy laws.

This content was published on June 24, 2002 minutes

Villiger said on Monday that critics of Switzerland were out of step with the reality of the Swiss banking system - pointing to the country's support for the fight against the financing of international crime and terrorism.

Speaking to the Swiss Press Club in Geneva, Villiger also said EU demands that Switzerland open its banking system to give European governments access to EU citizens' savings for taxation would be counterproductive.

"This system would not bring additional tax incomes, but would lead to a capital flight, for example towards the Far East," Villiger said.

Villiger's defence of Swiss banking secrecy followed a sharp rebuke on Friday from EU finance ministers meeting in the Spanish city of Seville.

Taxation troubles

The ministers criticised Switzerland for its reluctance to cooperate on the issue of taxation of EU citizen's savings.

Taxation remains the key stumbling block for negotiations on a series of bilateral accords covering cross-border cooperation that Switzerland hopes to sign with the EU.

Brussels maintains that it must have access to information about EU citizens' savings in Switzerland so it can levy appropriate taxes.

Switzerland has staunchly refused to provide the information, arguing that its banking secrecy regulations are "not negotiable".

However, Villiger said that Switzerland had offered to levy withholding tax on EU citizen's savings in exchange for maintaining its banking secrecy.

"I know of no other sovereign state that has offered its neighbours such a solution," Villiger said.

swissinfo with agencies

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