Swiss Insist Banking Confidentiality Is Non-Negotiable
by Ulrika Lomas, Tax-News.com, Brussels
06 April 2004

An agreement between the European Union and Switzerland over the Savings Tax Directive, seems to be a distant prospect, after the Swiss Finance Minister Hans-Rudolf Merz announced that his country has no intention of relinquishing banking confidentiality.

"Surrendering banking customers' secrecy is out of the question to us," Merz told reporters following a meeting with his German counterpart, Hans Eichel. Merz added that the Swiss banking system already contains measures which help to prevent fraud.

Switzerland is seeking an opt-out of part of the agreement which calls for member states of the EU to share information on suspected criminals. It is also insisting that agreement on the savings tax is linked to other issues such as the Schengen agreement on the free movement of individuals.

The EU's Internal Market Commissioner Frits Bolkestein however, urged European leaders last month to "stick to their guns" and ask Switzerland to sign an agreement "without any further delay."

The implementation of the savings directive on January 1 is dependent on the EU gaining the cooperation of Switzerland, Monaco, Liechtenstein, Andorra, and San Marino before June 2004.

However, with the Swiss firmly entrenched, and little sign of an agreement with the EU emerging, it is becoming increasingly likely that the implementation date could be delayed.

A comprehensive report on the OECD, FATF and other 'offshore' initiatives, including the EU's Savings Tax Directive, is available in the Tax-News Reports Shop at http://www.tax-news.com/reportshop/