Swiss on Path to Automatic Bank-Data Exchange: MinisterCatherine Bosley
Switzerland will consider allowing its banks to exchange client data automatically in concert with other major financial centers around the world as governments crack down on tax evasion, Finance Minister Eveline Widmer-Schlumpf said.
The country is discussing parameters for swapping information automatically with the Organisation for Economic Cooperation and Development, with technical results of the negotiations expected as early as next year, Widmer-Schlumpf said at an Academy & Finance banking conference in Geneva today.
“We’re at the moment going toward a system of automatic data exchange,” she said. “But I think it’s important to have a system, a standard that’s international, that’s accepted by the important financial centers that are our competitors.”
Banking secrecy has been enshrined in the nation’s law since 1934, helping Switzerland become one of the world’s most important offshore financial hubs. It has faced pressure from the European Union to join a system of automatic exchange of bank-account data, as the bloc seeks to crack down on tax evasion.
In June, Widmer-Schlumpf took the unprecedented step of announcing that Switzerland may go along with the global initiative of data exchange if the standard were recognized and implemented by other major financial centers. Changing Swiss law to allow this could be put up for a national referendum.
The automatic exchange of information wouldn’t deal with the problem of existing undeclared assets held by Swiss banks, Widmer-Schlumpf said.
Therefore, Switzerland is trying to clinch a framework deal with the EU to allow the negotiation of bilateral agreements with individual countries to handle legacy untaxed wealth, Widmer-Schlumpf said.
“We have to find a solution for the past,” she said. “If we don’t find a solution for the past, we can’t change systems.”
Switzerland signed withholding tax agreements with Austria and the U.K. that allow the countries to recoup tax revenue and preserve secrecy. A similar deal with Germany was rejected because of parliamentary opposition in Berlin.
“The question is how to regularize the past with current law” in Switzerland, she said.
At least 12 Swiss banks, including Credit Suisse Group AG and Julius Baer Group Ltd., are under investigation in the U.S. for allegedly helping wealthy Americans cheat on their taxes.
The Swiss government has negotiated an agreement with the U.S. that divides them into four categories based on the extent of their U.S. business. Banks are bracing for high fines, after Wegelin & Co., the oldest Swiss private bank, pleaded guilty, paid $74 million and then closed its doors.
At least two Swiss private banks, Bank Frey & Co. and Gutenberg Group AG, have announced plans to drop their banking business because of additional regulatory burdens.
The price banks are being asked to pay is “very high,” Widmer-Schlumpf said. “We did what we could with the United States,” she said, adding that the negotiators had met 30 times.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- YouTube Bans Firearms Demo Videos, Entering the Gun Control Debate
- Under Fire and Losing Trust, Facebook Plays the Victim
- Fed Lifts Rates, Steepens Path Through 2020 for More Hikes
- Stocks Tumble, Bonds Gain as Trade Tensions Rise: Markets Wrap
- Uber Autonomous Accident Video Shows Car Just Before Collision