Swiss private banks want clearer legislation over bank secrecy. - swissinfo.
Switzerland has got itself off the so called OECD grey list of tax haven states by committing to more than 12 new or revised Tax Information Exchange Agreements and Double Tax Agreements including the latest for of the OECD standard information exchange clause which gets round bank secrecy.
And now the backlash has begun amongst Swiss private bankers. it's reported that:
The Swiss Private Bankers Association (SPBA) on Thursday asked the government to look more carefully at the details of renegotiated double taxation agreements. Parliament was also urged to draw up a legal framework to allow concessions without breaking banking secrecy laws.
Speaking at the SPBA annual media presentation in Bern on Thursday, Anne-Marie de Weck, president of the Geneva Private Bankers Association, said it was time to defuse the legal minefield before more controversies erupted.
“We strongly believe parliament should adopt a strong legal framework to clarify the application of these [measures to align Switzerland with international tax demands] and clear up the uncertainty,” she told swissinfo.ch.
Such measures include the renegotiation of 12 double taxation treaties in the last 10 months with another 18 in the pipeline. The SPBA welcomed the decision to amend the treaties but questioned why a clause on exchanging tax information, demanded by the Organisation for Economic Co-operation and Development (OECD), had been included in agreements with some non-member countries.
It's been included for good reason: the world knows banking secrecy facilitates crime. That is not by chance. That is its purpose.
The Swiss can say what they like, but if they renege on these deals they should expect substantial economic sanctions to be imposed on them as a nation state. And the only reason for their suffering will be to assist criminals from elsewhere.
They may decide to do that. But they would be very unwise to do so. The world has had enough of such crime and will no longer tolerate it even if Swiss bankers will.
Remember it is only a year or so ago that Swiss bankers admitted that maybe half of all cash in Swiss banks was illicit. They really do not have a leg to stand on.
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Richard,
May I suggest you take a deep breath here:
The SPBA is coming out in support of the renegotiations, now completed, of various DTA’s to include the OECD standards of exchange of information (not automatic exchange though, the OECD does not require it, and it will never happen). Those include the DTA’s with France and the UK among others.
What the SBA is questioning is the inclusion of the OECD standards of infomation exchange with non-OECD members. It is a little different, isn’t it?
As for the sanctions, forget about it. While there has been some cheap talk at the G20 a few months ago, it was nothing bt that: TALK.
@Ted B
You may have noted most states are not OECD members
But the OECD does, quite rightly, demand highest standards, not lowest ones, of all
Richard, your comment to Ted B is dead wrong !
TIEAs (according to the art. 26 of the OECD model agreement) have actually and already been negotiated by Switzerland with the following 15 OECD countries :
– USA
– UK
– France
– Japan
– Mexico
– Norway
– Finland
– Denmark
– Spain
– Luxembourg
– Netherlands
– Poland
– Singapore
– Austria
– Turkey
Many more are in the process of negotiation.
Quite an impressive list, with many major and significant OECD countries, No ?
Best
Bernard
And you want to renege on them
Remember – they have not been ratified as yet so count for nothing
Richard, please stop being of such bad faith. Of the countries listed below, only Singapore is not an OECD country. Switzerland has all intentions to ratify these treaties with the standard OECD clauses for tax information exchange.
– USA (OECD)
– UK (OECD)
– France (OECD)
– Japan (OECD)
– Mexico (OECD)
– Norway (OECD)
– Finland (OECD)
– Denmark (OECD)
– Spain (OECD)
– Luxembourg (OECD)
– Netherlands (OECD)
– Poland (OECD)
– Singapore
– Austria (OECD)
– Turkey (OECD)
C’mon take a deep breath.
But all are subject to potential referenda
All might yet fail
And you are not seeking a universal standard
Nor are you showing any real commitment to actuiakl delivery in due course – every excuse under the book is being offered already as to why requests will be rejected
So you take the deep breath
Sanctions might be real….
Richard,
But all are subject to potential referenda
All might yet fail
If the people of Switzerland choose to reject said treaties in a referenda, who is anyone to deny them their democratic rights and choices?
Georges
Luxembourg’s stance may well be frustrating to you Richard, but its all about the “level playing field” argument. Morally, of course Luxembourg is trying to defend the indefensible, but it knows, as do we all, that Switzerland will benefit from Luxembourg giving up the withholding tax option and Switzerland seems completely beyond the control of the EU.
What is the point of 27 EU member states and the 3 Crown Dependencies all eventually agreeing to automatic exchange when Switzerland, sat right in the middle, sticks two fingers up to it all and benefits massively from doing so ? Unless there are EU sanctions imposed on Switzerland, it will continue to be Europe’s untouchable tax haven, and no extra EU taxes will be collected and so the whole objective is defeated.
Switzerland has to be made to play the game, or its got to be excluded from the European banking system altogether.
@Georges
Of course they can support crime if they so wish
So long as they realise they will pay the price
@Rupert
You also make the case for strong sanctions
And for making clear that tax evasion is a predicate offence for money laundering
Which the Swiss must realise – at cost to them, if necessary
Richard,
It isn’t a crime in Switzerland now is it?
Just because something is “illegal” does not necessarily mean it is wrong.
Georges
But Georges
It means that Switzerland condones criminality in that by existing as it does, it attracts the proceeds of ‘criminal by Swiss law’ money through adherence to its ‘not criminal by Swiss law’ nano-tiny global minority unknown clients’ wishes.
The very fact that in one previous job I had in a multinat, nobody I asked, when a serial anomaly arose every month for the period I was there, knew (or was witholding information to a junior) who or what a $10M balance was for and why it was being booked in the particular way that it was – because it was CHFedential, and so erased from my reporting, rang distant alarm bells (before Mr Murphy and TJN et al started to open the lid, at least in my sphere), meant that an uninterested jobsworth could sense the ‘wrongness’ just by box/tick procedure.
Why? I’m not saying anything was illegal, but the entire mystery seemed wrong.
Sure, “just because something is “illegal” does not necessarily make it wrong” can stand up in a deeper argument, but facilitating the socially devastating known-known wrongs and not wanting to tell anyone about it – save for Roman Polanski, oddly – undermines the philosophy behind hiding wealth.
The more dirt that comes out, the more filthy I feel for having spent more than a decade serving these corps, in a vain effort to conform.
For having that view I had my identity for posting on a Guernsey local forum. My employer was informed….extrapolate that and it means someone had been tracking my anonymity to source. Is that the way we want the world to go, Georges, commenting on someone else’s unknown cash, in the vaguest possible way out of my respect for 12 years of previous employers?
That’s what promoting secrecy does, and I’m a no-one.
edit first line last paragraph, otherwise it doesn’t make sense.
“…my identity exposed for….”
also
“Is that the way we want the world to go, Georges, persecuted for commenting on…”
Sorry!
It’s only money, folks!
Richard:
We will talk about “reneging” if and when one of these tax treaties is rejected in a referendum. For now, there seems to be fairly strong suppor for the treaties as currently drafted.
Of course there is no mandate to find a universal standard; tax treaties are billateral by design and should be reflective of the neotiating nations’ circumstances.
I believe that the Swiss, rightly, are concerned about balancing the savers’legitimate right to privacy with foreign authorities’ equally legitimat right to combat tax evasion. Your demands for automatic exchange completely fails to satisfy the need for this balance.
Imagine if there had been automatic exchange during WW2!
As for the tals about sanctions, I will simply assume that tempeatures in the UK are returning to normal and that it is getting a little under your collar.
@Georges
Tell me how theft is ever right?
Of course laws that abused human rights were wrong and had to be opposed
But since property rights are inseparable from the duty to pay tax – both coming from the same source and being indivisible the right to hold property is equally and exactly matched by the duty to pay tax
If you say tax is not due you have to condone theft
Is that what you do?
@Richard Murphy
No one who argues for automatic information exchange says it must be granted without consideration of human rights abuses
For that reason I would oppose it with quit a number of states right now
But they are exception, not norms
And in the meantime you support criminality – an outright abuse of human rights
And you seek to keep people in poverty
Where do human rights come into that?
Richard,
So I am sure you would have pushed for Switzerland to accept automatic exchange with Germany in 1936 (or in 1938 during a visit to Munich), because like many you would have been so sure about “peace in or time”.
Whose side are you with?
Your claim that I support keeping people in poverty in not even outrageous, it is laughable. I support the people’s legitimate right to privacy (ever heard of the Bill of Rights and the 9th amendment?), which should be balanced against the state’s legitimate right to tax.
Richard,
Tell me how theft is ever right?
We are speaking of governmental theft via taxation or something else?
Georges
@Ted B
Your slur is outrageous
It is the Left that fights fascism now
And as I have said, I do not propose automatic information exchange in the case where the recipient state has any record of serious human rights abuses
The evidence that tax havens harm the poorest nations is now acepted as fact by all reasonable people
And no one has a right to thieve which is what you are supporting
Privacy to commit crime is not a right
Richard
@Georges
Tax evasion is theft
Do you support tax evasion?
If so by default you support theft
(as you have already admitted – but answer all the same)
Of course, there is no right to privacy to commit a crime.
But there is also no right for governments or any of their agencies to invade individuals’ private sphere unless they can demostrate the presumption of crime.
If you fail to see this, then you may have to revise your statment that the Left is fighting fascism.
@Ted B
This is absurd
This means no tax authority would ever have the right to challenge a tax return, or require any third party ever supply information to a tax authority on payments made and on, and on
I hope you realise how pathetic your attempts to excuse crime are
No one’s privacy is being invaded. We’re just asking for tax return data
Do you really think there should be no obligation for anyone to advise a tax authority of taxable income arising?
Richard,
You said above “I do not propose automatic information exchange (AIE) in the case where the recipient state has any record of serious human rights abuses”.
Interesting. First, you differ from your colleagues at various NGOs who ask for full AIE, and second, you admit that AIE must be mitigated by criteria.
Let’s be pragmatic, which ones do you propose ?
If you pick a no-brainer like the prevalence or absence of Freedom (see a map on this topic in this week’s Economist), you have over 110 countries that are either not-free or partly-free.
Would you grant AIE to such non-free countries (where financial privacy is obviously difficult to guarantee), at the risk of seeing those who were exposed face plain extortion for their saved wealth, or worse, physical threats (including abduction of family members) for ransom or racket ?
The results would be pretty similar if you used rankings such as the one developed by Reporters without Borders, which confirms that major parts of the world live in non-free countries.
You talk of placing restrictions for countries where “the state has any record of serious human rights abuses”. Fine, but what about apparent democratic countries (such as several Latin American countries), but where para-military or mafia-like structures turn life into hell for sections of their people ? (structures that would be most thankful to Tax Research for obtaining lists (through bribes, for instance) of residents who would be covered by AIE ! ).
Tax Research and its cousins at Tax Justice Network should be less na?Øve about the state of the world when promoting full AIE.
Best
Bernard
@Bernard
How very odd
You say I am naive in my response to my explicit statement that there will have to be limits on AIE
TJN and TR-UK are both explicit on this and seek to constrain those with unlimited enthusiasm which may be misplaced
What we don’t accept though is that because some will have to be excluded from the process it does not mean it is essential that it be done for the more than 100 jurisdictions it could be used for
In that context we are challenging the abuse – and you are the person exploiting the abuse
Richard