David Prosser: The end of Swiss banking? If so, it’s about time too
It's not been the best few days for those keen to keep their affairs hidden from the prying eyes of their home country's tax authorities. On Thursday, Liechtenstein and Andorra said they were toning down their bank secrecy laws. Yesterday, Austria, Luxembourg and – the big one – Switzerland all said they would follow suit.
What has spooked these countries like never before is the threat of a concerted international attack on tax havens from the rest of the world. A crackdown on nations that enable other countries' residents to avoid – and evade – tax is one of the topics up for discussion at this weekend's meeting of the G20 nations' finance ministers.
Switzerland's banks are thought to have around $2 trillion stashed away on behalf of international depositors. Until now, they've got away with refusing to share the information about these accounts on the basis of a legal technicality concocted by Swiss legislators in 1934 (in the same laws as those that threaten heavy penalties, including prison sentences, for Swiss nationals who disclose banking secrets). Under Swiss law, the only circumstances in which banks can provide other countries with details of customers' accounts is if they receive a detailed claim about a specific individual with precise information about criminality of which they are suspected. Tax evasion – illegal everywhere else in the world but only a civil matter in Switzerland – doesn't count, by the way.
What has spooked these countries like never before is the threat of a concerted international attack on tax havens from the rest of the world. A crackdown on nations that enable other countries' residents to avoid – and evade – tax is one of the topics up for discussion at this weekend's meeting of the G20 nations' finance ministers.
Switzerland's banks are thought to have around $2 trillion stashed away on behalf of international depositors. Until now, they've got away with refusing to share the information about these accounts on the basis of a legal technicality concocted by Swiss legislators in 1934 (in the same laws as those that threaten heavy penalties, including prison sentences, for Swiss nationals who disclose banking secrets). Under Swiss law, the only circumstances in which banks can provide other countries with details of customers' accounts is if they receive a detailed claim about a specific individual with precise information about criminality of which they are suspected. Tax evasion – illegal everywhere else in the world but only a civil matter in Switzerland – doesn't count, by the way.
posted by temporal at 3/14/2009
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