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Spain refuses to extradite Swiss bank data ‘thief’

A Spanish court refused on Wednesday to extradite a former HSBC bank employee to Switzerland where he is wanted for allegedly stealing data that exposed thousands of suspected tax dodgers.

Spain refuses to extradite Swiss bank data 'thief'
Hervé Falciani in Spanish court. Photo: Pool/AFP

Hervé Falciani, a 40-year-old French-Italian, was arrested in Barcelona in July 2012 after he arrived by boat from France.
   
Switzerland asked for Falciani to be extradited to face charges of 
violating Swiss banking secrecy laws and revealing industrial secrets.
   
But Spain's National Court denied the request on the grounds that violating 
banking secrecy laws is not punishable as a criminal offence in Spain.
   
The court also argued that Falciani cannot be accused of revealing
 industrial secrets since the information he disclosed was given to the "competent authorities" and it was "related to illegal acts carried out through this bank which cannot be penally protected".

Spanish prosecutors had opposed Falciani's extradition on the grounds that he was helping authorities investigate tax fraud and because banking secrecy was abolished in Spain in 1977.
   
"We can't punish people who, when they observe criminal conduct where they 
work, denounce it to the authorities," Spanish prosecutor Dolores Delgado said during Falciani's extradition hearing last month in Madrid.
   
Falciani collected data on at least 24,000 customers of HSBC's Swiss 
subsidiaries from 2006 to 2008, while he worked in the bank's information technology development unit in Geneva.

He then passed on the data to French authorities.
   
The files, which were subsequently relayed by French investigators to their 
counterparts in the United States, Spain, Italy, Greece and several other European Union countries, led to a raft of prosecutions.
   
During his extradition hearing Falciani said his intention was to raise the 
alarm about the bank's activity and denied he sought to sell the information as alleged by Swiss officials.
   
"Never, in no instance," he said when asked if he had received any money 
for turning over the files to the French authorities.
   
He told the court he obtained the files from colleagues and said the 
information was so abundant that "if printed, it would fill an entire freight train."
   
Spain's National Court ordered Falciani's conditional release from jail 
pending his extradition hearing in December after the Spanish authorities argued he was cooperating in several European countries in investigations into tax evasion, money-laundering, corruption and terrorism financing.
   
Members of Spain's grass-roots "Indignant" movement against corruption and 
economic inequality had called for his release, seeing him as a hero.
   
Falciani fled to France from Switzerland in 2009 while he was under 
investigation by HSBC.
   
US officials then warned him he was in danger and advised him to go to 
Spain, Falciani said in a lengthy interview published in daily Spanish newspaper El Pais last month.
   
"They told me that the only safe place in Europe would be Spain, which had 
used my information with success in important cases," he said.

"They thought it would be very unlikely that Spain would approve my extradition to Switzerland."

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TAX EVASION

Switzerland’s banks remain among the world’s most secretive

Despite the progress made over the years, the Swiss financial sector continues to be one of the least transparent in the world. But there is good news too.

Switzerland’s banks remain among the world’s most secretive
Switzerland remains one of the world's least transparent nations. Photo AFP

Switzerland is in the third place in the 2020 Financial Secrecy Index released by the non-governmental organisation (NGO) Tax Justice Network (TJN), which rates 133 nations based on their financial transparency.

Two other European countries, Luxembourg and the Netherlands, are also ranked among the top 10 least transparent nations on the TJN’s list.

Despite being in the third place, Switzerland ranks better this year than it did in the previous edition of the Index, which is released every two years — it slipped from the first to third place. The Cayman Islands and the United States took the first and second spots, respectively.

Switzerland reduced its risk of being an offshore haven for tax cheats by 12 percent, “finally improving enough to move off the top of the index”, TJN said. 

READ MORE: Switzerland's strangest taxes – and what happens if you don't pay them

This improvement is mainly due to Switzerland extending its international network for the automatic exchange of customer information to more than 100 countries. 

Also, in a referendum held last year, Swiss voters accepted the Federal Act on Tax Reform and AVS Financing (TRAF). This legislation introduced major changes in the Swiss tax system by ending some preferential tax schemes and replacing them with new regulations which are in line with international standards.

This tax reform prompted the European Union to change Switzerland's status from ‘tax haven' to one which is EU-compliant, removing strict controls on transactions within the EU. 

So why, despite all the reforms, does Switzerland still rank among the world’s least transparent nations?

According to a Swiss NGO Alliance Sud, wealthy people from poor countries can still hide their money here from the tax authorities of their home nations.

Alliance Sud noted that despite the progress made in the past years by Swiss financial institutions, “the fight against tax evasion remains insufficient”.

Switzerland is the world’s biggest centre for managing offshore wealth, with a quarter of global assets invested here.

For years, it has been placed on various lists of tax havens where wealthy foreigners could park their money. Faced with widespread criticism for this practice, Switzerland passed an anti-money laundering law in 1997 and introduced strict regulations against tax evasion.
 

 

 
 

 

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