Tuesday, April 26, 2011

Dirty, Dark, Sub-plots of Secrecy

The New York Times reported on April 20 on "New Swiss Tax Rules Signal Big Changes for Private Banks". The article discusses the proposed new arrangements whereby Germany and the UK would receive a stream of income on undeclared assets held in Swiss banks via a withholding tax, but Swiss banking secrecy would be preserved.

Troubling indeed that governments are explicitly sanctioning the continuation of the secrecy regimes that provide a black hole where billions of dollars in criminal funds vanish, with impunity for the perpetrators.

The recent events in Germany, whereby Banque Julius Baer received an institutional slap on the wrist of a piffling fine of EUR 50million for abetting German taxpayers to dodge their responsibilities - in contravention of German law - is worrying evidence of this trend and standpoint. The German government, in this case, is choosing not to assert a need to know the identities of the tax evaders and criminals with the hidden funds. See Richard Murphy's comments here in Laughing all the way to the Swiss bank.

The question must be asked - why do governments collude in protecting secrecy? What do their members, and associates, also have perhaps to hide?

Alongside this tacit approval and practical support of the culture and mechanisms of financial secrecy, these moves are a political tool subverting the move towards automatic information exchange. See Austria's and Luxembourg's Anglo-German fig leaf .


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