Swiss Banking Secrecy: The End is Nigh - Get Over it!
The Swiss government continues to maintain its out-dated position on banking secrecy, but international tax lawyer Philippe Kenel, who also happens to head the Swiss Chamber of Commerce in Belgium and Luxembourg argues that this dogged unwillingness to recognise changing political realities will undermine the Swiss negotiating position. Interviewed in the Tribune de Gèneve, Kenel says:
"Switzerland's only chance lies with negotiating the end of banking secrecy while it still has some value. Judging by the speed with which banking secrecy is being eroded, acting once we have our backs up against the wall, would be tantamount to waiting to be shot down. By that stage there would be nothing we could receive in return."
Kepel also argues that the Swiss authorities should "immediately begin negotiations to move towards automatic information exchange (with the EU), pushing for a long-transition period in order to maximise the potential benefits." He goes on to suggest 2018 as a possible implementation date, arguing that a long lead-in time would allow Swiss banks and their customers ample opportunity to adapt to the changed situation. Call us impetuous, but we think that eight years is way, way too generous to both the banks and their customers: what is being proposed does not require a massive technological or administrative leap, and there is no justification for such a long delay.
Elsewhere, in SwissInfo, TJN's Markus Meinzer counters claims that automatic information exchange infringes on personal privacy: "Already with the [current system of] exchanging information on demand, information can only be transferred to public authorities that are involved in tax administration and tax justice. A citizen cannot obtain the data."
By adopting automatic information exchange as the model for its relations with the EU, Markus argues,Switzerland would contribute to combating harmful global tax competition and also strengthen the legitimacy of its criticism of the secrecy space provided by trusts and shell companies in other jurisdictions. This is an important point: the current Swiss pleadings ring hollow, suggesting to the detached observer that the Swiss have no real interest in improving the framework for international cooperation, instead pointing fingers at others to stall progress. This is unlikely to strengthen Switzerland's negotiating hand with the EU, and it sure as heck won't improve Switzerland's already tarnished international reputation.
By now even the most backwards of the cantons should have recognised that the end of banking secrecy is nigh. The only honourable way forward is to negotiate a speedy transition to fully automatic information exchange, and to join forces with governments and civil society organisations that are campaigning to put an end to other forms of secrecy, including trusts and treuhand.
"Switzerland's only chance lies with negotiating the end of banking secrecy while it still has some value. Judging by the speed with which banking secrecy is being eroded, acting once we have our backs up against the wall, would be tantamount to waiting to be shot down. By that stage there would be nothing we could receive in return."
Kepel also argues that the Swiss authorities should "immediately begin negotiations to move towards automatic information exchange (with the EU), pushing for a long-transition period in order to maximise the potential benefits." He goes on to suggest 2018 as a possible implementation date, arguing that a long lead-in time would allow Swiss banks and their customers ample opportunity to adapt to the changed situation. Call us impetuous, but we think that eight years is way, way too generous to both the banks and their customers: what is being proposed does not require a massive technological or administrative leap, and there is no justification for such a long delay.
Elsewhere, in SwissInfo, TJN's Markus Meinzer counters claims that automatic information exchange infringes on personal privacy: "Already with the [current system of] exchanging information on demand, information can only be transferred to public authorities that are involved in tax administration and tax justice. A citizen cannot obtain the data."
By adopting automatic information exchange as the model for its relations with the EU, Markus argues,Switzerland would contribute to combating harmful global tax competition and also strengthen the legitimacy of its criticism of the secrecy space provided by trusts and shell companies in other jurisdictions. This is an important point: the current Swiss pleadings ring hollow, suggesting to the detached observer that the Swiss have no real interest in improving the framework for international cooperation, instead pointing fingers at others to stall progress. This is unlikely to strengthen Switzerland's negotiating hand with the EU, and it sure as heck won't improve Switzerland's already tarnished international reputation.
By now even the most backwards of the cantons should have recognised that the end of banking secrecy is nigh. The only honourable way forward is to negotiate a speedy transition to fully automatic information exchange, and to join forces with governments and civil society organisations that are campaigning to put an end to other forms of secrecy, including trusts and treuhand.
posted by TJN at 6:31 am
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