My sources tell me that:
The European commission has realised that the [proposed UK and German] DTAs [with Switzerland] would compromise the EU work on automatic exchange of info. Now the Commission has been in direct touch with Germany and UK regarding this issue.
Most important is that they are concerned about Switzerland now being a conduit for all black money back to the UK / Germany if assets are regularised...
So they should be. With the fundamentalist free market government of the UK (yes, I mean that fundamentalist comment — those in our government are as dangerous in their ideological blindness as those usually attributed with such description) being in my opinion at the forefront of this process of promoting bank secrecy to assist their clear objective of undermining government and taxation whilst promoting income inequality the European Commission clearly has very good cause to be concerned. In April 2009 the world agreed that closing down tax havens was fundamental to creating the transparency markets need and generating the revenues all governments are due. Now the ConDems (yes, both parties) are going out of their way to support the corruption that secrecy jurisdictions in general and Switzerland in particular promote.
This is an act of the highest international irresponsibility. I am amazed that international protest is not pouring in. Why? Well note this from Swissinfo (who I note have been reading this blog this week):
Barely two years ago Swiss banking secrecy appeared to be on the rocks with little prospect of it surviving a battering from the United States and Europe.
The impending negotiations of tax accords with Britain and Germany now appear to have lifted the pressure from the Swiss financial centre’s most prized asset. But to what extent has the threat really been lifted?
Konrad Hummler, head of Switzerland’s oldest private bank Wegelin, believes that talks with the two powerful countries — which centre on withholding tax as opposed to an automatic exchange of tax information — will leave banking secrecy intact.
“The protection of privacy through banking secrecy has been strictly separated from the issue of taxation,” he told the Tages-Anzeiger newspaper. “Banking secrecy has therefore been strengthened because it is no longer under suspicion of protecting injustice.”
That’s his story.
But as they note:
Writing on his blog this week, Richard Murphy of the watchdog group Tax Research UK accused Britain of “abandoning the fight against tax havens”.
“No indication is given as to how these accounts are to be regularised,” he went on. “Indeed, there is no prospect that they can be because the £40 billion [SFr63 billion] or so of evaded assets will not have to be declared by name by the Swiss. In that case there is no prospect of UK interest or penalties being charged.”
And Swissinfo added:
But before Swiss bankers can breathe a collective sigh of relief that their cherished secrecy has been saved, the European Union warned that the proposed deals with Germany and Britain would not be allowed to supercede EU demands for an automatic exchange of tax information.
“We have assurances from Germany and the United Kingdom that they are totally behind our aim of achieving automatic exchange of information within the EU, and of promoting as broad a system of information exchange as possible at an international level,” said Emer Traynor, spokeswoman for the EU commissioner for taxation, Algirdas Semeta.
“If there is a conflict, European law always takes precedence over bilateral agreements,” she added.
The pressure to ensure the EU delivers has increased. This is a fight with Cameron they have to win.