• Switzerland's news in English
 
app_header_v3

OECD deal means 'end of Swiss banking secrecy'

AFP · 15 Oct 2013, 16:16

Published: 15 Oct 2013 16:16 GMT+02:00

This marks "the end of banking secrecy" in Switzerland, the head of tax issues at the Organization for Economic Cooperation and Development, Pascal Saint-Amans, told AFP.
   
The inclusion of Switzerland in the agreement to exchange information among more than 60 countries will be "highly significant" in the fight against tax evasion, he said.
   
OECD Secretary-General Angel Gurria said Switzerland's adherence to the the Multilateral Convention on Mutual Administrative Assistance in Tax Matters "sends a clear and strong signal that Switzerland is part of the community of states which consider international tax co-operation as a necessity".
   
At the instigation of many advanced countries, the Paris-based OECD has spearheaded a clampdown on tax evasion and the concealment of illicit funds.
   
Swiss banking secrecy in its current form took shape before World War II, and provided the victims of Nazi persecution with a way to protect their assets.

The movement to scrap the policy in Switzerland and other well-known "tax havens" arose after the financial crisis of 2008 and subsequent eurozone debt crisis.
   
Ordinary people with money woes, often facing higher taxes to cover the 
costs of the crises, were outraged by revelations of tax evasion and avoidance by corporations and wealthy individuals.
   
US tax authorities in particular took tough action against some Swiss banks.

   
At the same time, high-profile controversies arose when lists of bank 
accounts stashed in Switzerland were leaked to tax authorities elsewhere.
   
The Swiss ambassador to the OECD, Stefan Flückiger, said the signing of 
the Convention confirms Switzerland's commitment to fight tax fraud and "safeguards the integrity and reputation of the country's financial centre."
   
The convention's signatories so far include all 20 members of the Group of 
Twenty (G20) of the world's leading economies, as well as more than 40 other countries.
   
In addition to exchanging information, signatories agree to organize 
simultaneous controls to track tax fraud.
   
The main objective is to ramp up the effort to catch cheats who hide assets 
and transactions behind the protective laws of offshore tax havens.
   
Until now, many tax authorities and their governments have complained that 
cross-border tax investigations have been stymied by the complex routes used to hide funds, coupled with obstructionism on the part of some national authorities.
   
These difficulties have been exacerbated by the increased openness of 
frontiers to capital flows as well as the use of new technologies for transferring money.
   
Saint-Amans said the convention "prepares the way for the automatic 
exchange of tax information".
   
The OECD wants to make this the normal practice internationally, but it 
continues to be an extremely sensitive issue for the Swiss, as well as for some other countries.
   
Under the convention as it stands, however, the automatic exchange of 
information is optional.
   
The OECD noted that among the countries that have signed the convention or 
are preparing to are a number of jurisdictions often described as tax havens, some under the British crown, notably in the Caribbean.
   
Saint-Amans said the noose would continue to tighten on tax evasion and 
that countries that do not sign up to the agreement "would begin to be sidelined".
   
He said: "I can't see how going back could be possible."

   
Switzerland, which has been under strong pressure since the financial 
crisis to open up its banking secrecy and to tax foreign assets, announced its intention to sign the agreement last week.
   
At the same time, it expressed its concern to preserve the integrity and 
reputation of its financial institutions.
   
The next hurdle — which could prove a formidable one — is ratification of 
the convention by the Swiss parliament.

Your comments about this article

Today's headlines
Wimbledon
Federer wins uninspired Wimbledon opener
File photo: Miguel Medina/AFP

Roger Federer was well short of his best as he advanced to the second round.

Nestlé’s birthday bash ruffles festival feathers
Lausanne's Festival de la Cité has not received the same special dispensation as Nestle, despite asking. Photo: Régis Colombo/Lausanne tourism

Is Nestlé getting special treatment from local authorities?

Germans avoid plunge off Swiss mountain pass
Photo: Graubunden cantonal police

Two holidaymakers had a lucky escape when their brakes failed coming down a mountain pass.

Brexit
Swiss-EU talks ‘must’ resume this summer
Scheider-Ammann will seek talks with European Commission President Juncker. File photo: Emmanuel Dunand

Switzerland will insist it is heard in Brussels and not cast aside by last week’s Brexit vote, the Swiss president has said.

Euro 2016
Unlucky Swiss crash out of Euros on penalties
The Swiss hit the bar and forced the Polish goalkeeper into numerous saves as the match wore on but just couldn't convert a chance. Photo: AFP

Poland beat Switzerland 5-4 in a penalty shootout in the first Euro 2016 last 16 clash on Saturday with new Arsenal star Granit Xhaka missing a crucial kick for the Swiss.

Swiss-based IT worker at Panama Papers firm released
The identity of the man who worked at the Geneva offices of Mossack Fonseca has been withheld. Photo: AFP

A Swiss-based IT worker arrested earlier this month on suspicion of stealing documents from the law firm at the centre of the Panama Papers scandal was released from custody on Friday, his lawyer said.

Six authors who found inspiration in Switzerland
Chillon as it was in Byron's time. Photo: www.mymontreux.ch

It's 200 years since English poet Lord Byron visited Lake Geneva, putting it firmly on the literary map. But he's not the only one to have found inspiration in the country's hills and glaciers...

Brexit vote will hit Swiss economy: president
Schneider-Ammann has warned the Swiss economy could suffer. Photo: AFP

President Johann Schneider-Ammann has warned that Brexit will have a negative impact on the Swiss economy.

River swimmers advised of cold water risks
Cooling off should be done with care. Photo: bad-info.ch

As Switzerland basks in the sun swimmers are being warned that many rivers have yet to heat up.

SNB moves to stabilize franc after Brexit vote
The SNB is worried about the franc's strength. Photo: AFP

Central bank intervenes in the foreign exchange market to stabilize the franc following Brexit.

Sponsored Article
Education abroad: How to find an international school
File photo: Kochtopf
National
Anger as Swiss council plans non-pork school lunches
File photo: Jen/Flickr
Society
Geneva to get 'café fellatio' by end of year
Features
How Switzerland's scenery inspired some of the world's greatest authors
Sponsored Article
Why you should attend an international job fair
Photo: Fabrice Coffrini/AFP
National
A guaranteed basic income: why did the Swiss say no?
Photo: Andreas Gerth/Swiss-Image.ch
Features
Switzerland’s breathtaking Unesco World Heritage sites
Photo: Nestle
Culture
Nestlé celebrates 150 years with museum openings
Photo: Jan Geerk/Swiss-image.ch
National
Report: Swiss are officially ‘good’ for the planet
Sponsored Article
Why Swiss hospitality graduates are in demand
Photo: Fabrice Coffrini/AFP
National
World agog at bizarre Gotthard Base Tunnel opening
Photo: Coop
Swiss supermarkets look to scrap free plastic bags
Photo: IMD
Business & Money
Report: Swiss economy more competitive than US
Photo: Aargau police
National
Murderer escapes from Swiss psych hospital
Photo: Grande-Dixence SA/essencedesign.com
Features
8 fantastic reasons to visit French-speaking Switzerland
Photo: Terroir Fribourg
Lifestyle
Swiss village to make world’s biggest meringue
Sponsored Article
Avoid hidden fees when sending money overseas
Photo: Swiss Tourism
Features
10 unspoken rules for fitting in with the Swiss
Photo: Alp Transit Gotthard
National
Gotthard base tunnel: what you need to know
Photo: Caroline Bishop
Sport
Swiss cantons team up to vie for winter Olympic games
Photo: Broad Bean Media
National
Basel: Muslim schoolboys must shake hands or face fine
Photo: Emmanual Dunand/AFP
Sport
Brother of Belgian bomber wins gold in Switzerland
Photo: Gstaad Tourism
National
Snow puts end to hottest weekend of year so far
File photo: Abhishek Jacob
Lifestyle
Swiss court vetoes wedding of couple with 50-year age gap
Photo: Filippo Monteforte/AFP
Culture
Dog day afternoon: Swiss saint meets Pope in Rome
Photo: Fabrice Coffrini/AFP
Business & Money
Pink diamond sold for record-breaking $31m in Geneva
File photo: Candida Performa
Lifestyle
Revealed: living in Switzerland could prolong your life
4,575
jobs available