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Swiss take fall as US and UK 'havens' thrive: report

Lyssandra Sears · 3 Apr 2012, 09:59

Published: 03 Apr 2012 10:56 GMT+02:00
Updated: 03 Apr 2012 09:59 GMT+02:00

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Despite the recurrent finger-pointing aimed at Switzerland for providing a haven to tax dodgers, the Tax Justice Network has found that the US and the UK hold over 50 percent of the global offshore market.

Switzerland has been the big loser in the war on tax havens, the newspaper Tribune de Genève reports.

According to the Tax Justice Network, a British organisation made up of accountants, lawyers, academics and others, for all the criticism and worldwide attention, Switzerland is only responsible for about 6 percent of the offshore trade.

“When you read the statement which followed the G20 in April 2009, we find that the emphasis is made on banking secrecy, a Swiss concept, while trusts, a typically Anglo-Saxon legal tool, are forgotten,” Nicholas Shaxson, writer and researcher for the Tax Justice Network, said.

Shaxson is a British author best known for his investigative books, Poisoned Wells (2007) and Treasure Islands (2011), the latter of which is an investigation into the harmful effects of tax avoidance.

Having completed his research, Shaxson now believes that the US and the UK are the biggest tax havens in the world.

According to his survey, the US is responsible for approximately 21 percent of offshore business, while the UK is responsible for about 20 percent. A further 10 percent derives from trade carried out through Britain’s dependent territories, such as the Cayman Islands, and crown dependencies Jersey, Guernsey and the Isle of Man.

The survey also indicates that both the US and UK meet the four criteria used by the OECD to designate tax havens. In each of the countries, possibilities exist to pay little or no tax; there is a lack of transparency in the tax system; there is a lack of information exchange with other countries; and many companies carry out fictitious activities. 

But these countries have never been formally investigated. And now, after persistent pressure from the US, Switzerland has lost its bargaining power and is no longer in a position to point the finger back, writes Tribune de Genève.

Lyssandra Sears (news@thelocal.ch)

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Your comments about this article

2012-04-04 00:01:22 by Global Macro
As an American, I hate to see the US government behaving in this way. The rights of our citizens are under attack over here as well. I do hope that Switzerland finds a way to restore bank privacy. (HoppSwisse corrected me once before. It is not about bank secrecy; it is about bank privacy.) I do believe that there is a strategy that would work. There is a principle of law in the US that all citizens are to be protected from unreasonable searches and seizures. Before the government may conduct a search, the government must appear in a court and present evidence to a judge to support a finding that there is "probable cause" to believe that a crime has been committed by the person to be searched, and that the search will produce evidence to support a conviction. If that burden of proof is satisfied, the court will issue a search warrant permitting the search. If not, the court will reject the application for a search warrant. I have not understood why Switzerland could not institute a similar legal procedure to protect its banks and its depositors. Just say that if the US appears in a Swiss court and presents evidence to support a claim of probable cause, the Swiss court will authorize a search of the subject’s accounts. Otherwise, Swiss banks and its depositors are protected from searches. Also, from a public relations perspective, this would be a very appealing strategy. It would be very defensible and difficult for the US (and other governments) to overcome. It would be a winner from a legal perspective and from a public relations perspective.
2012-04-03 15:52:12 by smeghead
Can't agree more, with the comment above. this is the same with the us over the internet too
2012-04-03 15:24:03 by HoppSuisse
The US is the largest tax haven in the world.
Foreigners (Swiss for example) can invest in US Banks and Stock Markets and NO tax will be withheld.

Switzerland is NOT a tax haven.
Foreigners (US Citizens for example) who invest in Swiss Banks have 30% tax withheld.

This shows us that the US is not concerned about tax, they are concerned about control and the ability to confiscate the peoples money. This is why they do not want privacy freedom. Those who do try to have privacy are threatened with prison.

It is our own fault, we have allowed the politicians to break our Bank Privacy laws and now they are calling for us to change the law to be like the US.

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