Some foreign media coverage of the vote implies that the treaty is designed to help out 11 Swiss banks under investigation by the US Justice Department for illegally assisting Americans in the US to hide money offshore from the IRS, the tax arm of the US.
But the treaty was in fact agreed to in June 2011 by both governments. Credit Suisse announced in June 2011 that it was being investigated by the US Department of Justice and the cantonal bank in Basel nearly a year ago, while other banks, whose names were announced only in January 2012, apparently became aware of the investigations late in 2011.
The revised treaty grew out of negotiations that had been going on since the 2009 debacle where the Swiss government approved UBS turning over data on thousands of bank clients as part of a deal with the US.
Swiss Parliament, Bern
The death of banking secrecy greatly exaggerated?
The right-wing UDC has been vocal in opposing the treaty, arguing that it signals the death of banking secrecy and is financial suicide, while some Swiss-German media have been making dire predictions for months, often reported as news from unnamed sources, about the impact of such a vote. Both have been picked up widely outside Switzerland as a sign that the treaty signals the end of banking secrecy, a view not held by many middle of the road politicians and the government, as well as the Bankers Association, which 22 February came out in favour of a regulation that would require offshore banking clients to make tax self-declarations. RTS, public broadcasting, says there has been a significant shift in banking secrecy since 2009, but Switzerland continues to support it as part of a broader respect for privacy. Today’s vote, it notes, should allow US-Swiss talks over American investigations into Swiss banks to move ahead.The treaty is designed to replace a 1996 treaty, currently in effect. Both provide for judicial assistance in cases of tax fraud, but the new treaty defines the framework for this more precisely and admits tax evasion as well as fraud, in some cases, as grounds for a request for assistance.
Tax evasion is a crime, but not a penal offense in Switzerland, whose list of allowable tax deductions is far shorter than those of the IRS, and evasion has until now not been accepted as grounds for assistance.
New agreement amended in November
The June agreement was amended in November after a parliamentary commission recommended, 7-3, that this addition be made: it allows for group requests covering several financial accounts to be made together and, significantly, bank data could be given to US authorities without the US first providing a name and account number, although this assistance would be provided in a very limited number of cases. The change was initially expected to face stiff opposition in Parliament, but in the end it passed with a strong majority.Switzerland and the US have been discussing, in separate talks, the case of the 11 Swiss banks under investigation by the US Department of Justice. The Swiss government in late January approved the delivery of coded bank data to the US as a goodwill gesture, with President Eveline Widmer-Schlumpf noting that the data could be decoded once the two countries reach a “global agreement”: “We will only decode when we have found a solution with the United States on all the banks that are under discussion.”
UK, Germany should revise part of agreements with Swiss, says EU tax head
European Union Tax Commissioner Algirdas Semeta said in a letter to Denmark’s prime minister 5 March that the UK and Germany will need to revise part of the tax agreements they have negotiated with Switzerland since last summer. Bloomberg reports that “when countries make bilateral tax agreements with other nations, EU policy calls for them to leave out any areas covered by a common European framework, Semeta said. In the case of savings income, the bloc has existing information-exchange rules and is working on additional measures related to interest payments, ownership stakes and the 27-nation EU’s relationship with Switzerland, he said.”Semeta’s remarks were more positive than earlier EU threats to sue Switzerland for working out bilateral deals with two of its member countries.
Background story, GenevaLunch, “Swiss government raises the ante for banks, other countries”, 22 February 2012
Posted by Ellen Wallace on 5 March 2012 at 22:45 |
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