Swiss Rubik deals are sliding backwards

Switzerland's useless "Rubik" tax deals seem to be nudging their way back into the news again. These deals ostensibly offer clients a chance to pay a lot of back taxes and ongoing taxes, while preserving their anonymity though we have demonstrated repeatedly that they will not raise even a tenth of what the politicians and the Swiss bankers have been promising.

Politically speaking, Rubik is sliding backwards, though it's not a simple story.

On the one hand, it looks as if the Germans are finally -- finally -- waking up to the gaping holes in the deal, and finding some backbone: they look quite likely now to scupper the whole thing. Germany's highbrow newspaper Die Zeit reports, in an article entitled Back to Square One:

"Most likely, the [Swiss] tax agreement with Germany is doomed to fail."

The article even quotes the head of the head of Switzerland's Basler Kantonalbank as saying that Rubik is a waste of time, and that

"The automatic exchange of information would be more favourable to us."

A few hours ago the former head of the Swiss National Bank, Philipp Hildebrand was more forceful, saying that:

“The Swiss fiscal refuge is over.”

Swiss bankers are certainly sweating. From Swissinfo:

"Today I met several bankers in Zurich. They were all shaking their heads saying, ‘In 40 years of operations we’ve never had a crisis like this one – a war like the one being waged against the Swiss banking system. We’re in the artillery sights of every country and every day there are new attacks’,” recounted Paolo Bernasconi, a business law professor at St Gallen University and former Ticino public prosecutor.

"Many bank directors are unable to leave Switzerland because they risk being arrested.”

For its part, World Radio Switzerland interviewed a range of commentators for their programme, including TJN's John Christensen and Peter Kunz of the University of Bern who recognised that banking secrecy was a major attraction for Swiss Banks, but regards its days as over:

“I would say the banking secrecy is undoubtedly one of the biggest assets Switzerland had. Of course no one really can say how many billions of dollars, or German Deutsche Marks, today euros, came to Switzerland for this protection aspect, but it was at least a big issue. On the other side, I am pretty sure that the political stability, we have peace in Switzerland, we have a strong currency, are also additional assets of our country. These assets, I think, must be strengthened for the future because the bank secrecy as we have known it for the last 40 years that’s done. Banking secrecy, bank secrecy for tax fraud and tax evasion reasons, that’s done.”

Christensen is not won over by the idea that offshore secrecy has been consigned to history. Steps have been taken to tackle banking secrecy, he argues, but little or nothing has been done to tackle the more complex offshore structures used by sophisticated tax evaders:

"I think it is fair to say we are seeing strengthening of transparency on bank account secrecy. That’s well and good, but what we’re not seeing is improvements of transparency in other areas, particularly off-shore companies, and off-shore trusts, and off-shore fiduciaries, and that’s the next big step. Because otherwise, simply tackling bank secrecy will lead to a trend towards much, much more complex secrecy structures involving off-shore trusts, and off-shore companies."

On the other hand, not all is rosy for the citizens of Germany and other countries which are trying to move ahead with their own Rubik deals.

Time has run out for today's blogger; more on this subject very soon.