Swiss Banks Will Cooperate

After a meeting on Friday (13 March), the Swiss government agreed to relax its strict bank secrecy rules and cooperate more on tax evasion in a last-ditch attempt to fend off a global crackdown on tax havens that is rattling the offshore banking industry. In a statement, the government said it would embrace standards for tax cooperation set by the Organisation for Economic Cooperation and Development (OECD). "The Federal Council has decided today that Switzerland will apply the OECD standards relative to administrative cooperation on tax matters, in conformity with Article 26 of the OECD's convention," Swiss President and Finance Minister Hans-Rudolph Merz told journalists. An upcoming meeting of G20 developed and emerging nations that is due to discuss tax havens prompted Switzerland, Austria and Luxembourg on Friday to join recent moves by other offshore centres and offer more tax transparency. "…In international relations and according to the double tax agreements that will have to be reviewed, adapted, we won't differentiate evasion and fraud anymore, and that's the new element, and that's exactly what the OECD's standard agreement demands", he said, before warning that there would be no automatic exchange of information. "I think the Federal Council in its whole this morning, made a decision for the best of our country, because it integrated a dynamic international development to improve our country's economy", Merz said. Switzerland is the world's biggest offshore financial centre, holding an estimated 2 trillion U.S. dollars of global wealth held abroad. The country has been under pressure to relax its strict bank secrecy rules from a U.S. tax fraud investigation targeting its number one bank UBS. In a separate statement on Friday, the Swiss government said it would instruct a U.S. law firm to defend the country's position in a civil case against UBS that seeks to force the bank to reveal details of 52,000 bank clients. A decision on Thursday by tiny offshore rivals Liechtenstein and Andorra to adopt more tax cooperation has put even more pressure on Berne. It comes on the heels of moves by other centres, including Singapore, Hong Kong, Jersey and the Isle of Man, to open up.

MediaScrape | March 13, 2009

Tags:. .liechtenstein. .merz. .berne. .andorra. .luxembourg