Swiss fear pressure on bank secrecy - Capital Business
Connect with us

Hi, what are you looking for?


Swiss fear pressure on bank secrecy

ZURICH, November 11 – Switzerland is likely to come under further pressure from the United States over its prized system of banking secrecy after the election last week of Barack Obama, key sector players predicted.

The newly-elected US president, who formally takes office in January, is known for his hard line on fiscal evasion, having jointly presented a "Tax Haven Abuse Act" to the Senate back in 2007.

Switzerland was one of 34 countries listed as a potential site for tax evasion by US clients in the bill and observers said that while that particular piece of legislation is unlikely to see the light of day, it could yet inform the new president\’s policy.

"American legislation can move very quickly and laws can get passed speedily," said Martin Navillle, head of the Swiss-US Chamber of Commerce.

"The United States is looking for more fiscal receipts" to finance its massive bailout plan for Wall Street giants battered by the global economic crisis, he added.

His comments echoed warnings by Switzerland\’s Foreign Minister Micheline Calmy-Rey, who said that pressure on the country was bound to increase after Obama\’s victory.

"The pressure on Switzerland is going to increase, also from the United States," Calmy-Rey told the weekly SonntagsZeitung in an interview.

"Countries across the world have injected billions into financial markets to save the banking system," she noted, adding "they now have to find fiscal means" to finance these rescue plans.

Switzerland has come under regular fire for its banking secrecy laws which other countries see as a helping tax evasion.

Advertisement. Scroll to continue reading.

In the United States, the country\’s image has been particularly tarnished due to a scandal involving Switzerland\’s largest bank UBS and its alleged role in facilitating US tax evasion.

UBS said in July that it was halting its offshore banking services for US citizens after it came in for scathing criticism from the authorities.

The bank\’s chief financial officer of global wealth management, Mark Branson, told a US senate committee that the bank "genuinely regrets" failures in complying with US regulations and would stop offering offshore banking to Americans.

German Finance Minister Peer Steinbrueck sparked outrage in Bern last month by calling for Switzerland to be placed on an OECD "black list" of countries that did not cooperate in the fight against tax fraud.

Swiss authorities called in Germany\’s ambassador and Calmy-Rey said that Steinbrueck\’s comments did not meet the standards of a "legal state."

But Calmy-Rey assured the SonntagsZeitung that the government would defend banking secrecy in the face of foreign criticism.

"We have nothing to fear," she said.

Not everyone is so confident as the foreign minister, however.

Maneul Amman, head of the Swiss Banking and Finance Institute at the University of St.-Gallen, said there is a definite, real risk that the United States will keep up their pressure.

Advertisement. Scroll to continue reading.

"The Swiss model is going to remain under pressure and this pressure is going to get stronger rather than weaker," he told AFP.


More on Capital Business