Report Says Majority Of Swiss Cabinet Ready To Relax Banking Secrecy Rules

by Ulrika Lomas, Tax-News.com, Brussels

23 April 2002

According to reports released over the weekend, the majority of the Swiss cabinet is in favour of making some concession to the European Union over banking secrecy, in order to restart the stalled negotiations on a second set of bilateral treaties.

The talks ground to a halt over the government's refusal to waive banking secrecy in cases of indirect tax evasion, such as customs or VAT fraud. However, according to a report in the NZZ am Sonntag Finance Minister, Kaspar Villiger, has been revealed as the sole fly in the EU's ointment.

The Sunday newspaper quotes unnamed 'well-informed sources' as saying that six of the seven cabinet members are prepared to give at least some ground, with only the Finance Minister adamant that the country should not budge on the issue.

Speaking late on Saturday, Mr Villiger admitted that there have been some differences of opinion between himself and his cabinet colleagues on the issue.

'This is the kind of standstill where both sides have to consider how to proceed. This is not a catastrophe, but it is not exactly satisfactory,' he acknowledged.

Those who support loosening banking secrecy provisions in certain cases have argued that the move would demonstrate the alpine jurisdiction's commitment to fighting fraud, and would allow it greater leverage when discussing maintaining banking secrecy in other, more important, areas.

However, the Swiss Finance Minister also has his supporters. Expressing his disappointment at the recent turn of events, Rudolf Dietrich, the head of the Swiss delegation which was, until recently, negotiating the 'Bilaterals II' treaties with the European Union said:

'They want us to adopt their standards just as if we were an EU member state. In my opinion, Switzerland should be treated like a partner, and as long as we're not a member state, we should be able to have our own special rules.'

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