Swiss banks should help clients declare their assets to foreign tax authorities and abandon rules that keep their wealth secret, Julius Baer Group Ltd. (BAER)’s outgoing Chairman Raymond Baer said.
“Switzerland’s good reputation as a reliable business partner would be damaged if clients did not get a standardized procedure for regularizing the past,” Baer, 52, said today in a speech to shareholders of the Swiss money manager that marked the end of his nine-year chairmanship. “Banking secrecy, as we know it, is history.”
Switzerland has signed tax accords with the U.K. and Germany that, if ratified by parliaments, will impose a levy on wealth held by Britons and Germans in the past and a new withholding tax on future income. The Alpine nation is also holding talks with the U.S. to resolve a Department of Justice investigation of 11 Swiss financial firms including Julius Baer and Credit Suisse Group AG.
Switzerland is trying to shed its image as an offshore tax haven reliant on secrecy laws dating to 1934, after national fiscal authorities and intergovernmental organizations began cracking down on people who bank money outside their country of residence.
The industry and politicians should work “intensively” on the country’s so-called white-money strategy and base it on global standards, Raymond Baer said. A withholding tax model is preferable to occasional demands for the free exchange of information between different jurisdictions, he said.
Daniel J. Sauter will replace Baer as chairman, the company reiterated today. Baer, who has spent most of his career with the family bank that was established in 1890, will head a special committee overseeing cooperation with the U.S. authorities, the firm said March 19.
Boris Collardi, the bank’s chief executive officer, said Feb. 6 he expects Julius Baer to pay a fine and hand over client data to the U.S. as part of a final settlement.
The Department of Justice indicted St. Gallen, Switzerland- based Wegelin & Co. on Feb. 2 for allegedly helping customers hide money from the Internal Revenue Service. Collardi said four days later that he doesn’t expect his company to be indicted.
Julius Baer has provided support for two employees charged in October with helping more than 180 U.S. clients hide at least $600 million in assets from the IRS.
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