Swiss feel the heat on banking secrecy

Switzerland was feeling the heat on banking secrecy on Friday after the United States stepped up its high-stakes tax probe against the biggest Swiss bank, UBS.

The widening US bid to force the bank to disclose the identities of about 52 000 US customers who allegedly evaded taxes added to recent tensions between the Alpine haven and its European neighbours.

“For me it’s the beginning of the end of the abuse of banking secrecy that’s still carried out legally in Switzerland, as well as elsewhere, to protect tax cheats,” said Bernard Bertossa, a former Swiss prosecutor who specialised in tackling money laundering cases.

The latest lawsuit was launched by the US Justice Department in Florida late on Thursday, hours after Swiss and US authorities announced a $780-million out-of-court settlement on another tax fraud case involving UBS.

The bank admitted responsibility and was forced by the Swiss financial regulator to hand over details of 250 to 300 US clients in what the US justice department called an “unprecedented move”.

Swiss Finance Minister Hans-Rudolf Merz insisted that banking secrecy was still intact, while business and bank leaders fended off US “pressure” and described the US case as isolated.

But Swiss media were unconvinced on Thursday.

“Banking secrecy, still only a myth,” titled the Tages Anzeiger newspaper, while Le Matin said the banking secrecy was facing a “death” threat.

Taxation will also be an issue when the Swiss foreign minister meets European Union Commissioner Benita Ferrero-Waldner in Brussels on February 26, officials said.

Switzerland has been facing increasing pressure from its EU neighbours over the past year to broaden measures to discourage income tax evasion.

The Guardian reported on Friday that British Prime Minister Gordon Brown was targeting Switzerland in a global clampdown on tax havens that he is trying to secure.

Brown did not mention Switzerland by name in a regular press briefing in London on Thursday.

“I am not going to name any particular organisations or countries because in the document it says very clearly that we want to look at all jurisdictions,” he added in remarks posted on Downing Street’s website.—Sapa-AFP

.
.

Client Media Releases

UKZN honours excellence in research
VMware is diamond sponsor of ITWeb's Cloud Summit 2019
Sanral engages communities on projects in Matatiele Municipality