Swiss Bankers Embark On Damage Limitation Exercise In United States

by Ulrika Lomas, Tax-news.com, Brussels

08 June 2001

A group of Swiss bankers has held seminars and meetings for Wall Street executives and congressional aides this week in the United States in a bid to persuade the US business and political sectors that Switzerland is not a tax haven that will tolerate criminal financial activities.

The Director of the Swiss Federal Banking Commission, Daniel Zuberbuhler, the Managing Director of UBS, Hans-Peter Bauer, and the Chief Executive Officer of the Swiss Bankers Association, Urs Roth, were among a series of top profile bankers providing presentations.

The EU plans to crack down on tax evasion by imposing a tax on cross-border savings and has requested banks to report on the interest earned by their customers. But Switzerland is finding it difficult to go against the grain of hundreds of years of traditional banking secrecy and is worried that the industry will lose its competitive edge if secrecy laws are relaxed. Swiss bankers are adamant that their laws do not foster money laundering and tax evasion activities: 'We don't want to be a haven for tax evaders, but not at the price of abandoning bank secrecy,' stated Urs Roth, president of the Swiss Bankers Association.

Although admitting that banking secrecy in Switzerland is 'not an absolute right,' Jacques Rossier, Managing Partner with Darier Hentsch and Co., spoke out in defence of the practice by saying that Switzerland 'has among the most stringent laws on money laundering, and enforcement is swifter in Switzerland than in other countries.'

According to news service, Swiss Info, some Americans have raised concerns over the 'effectiveness' of Switzerland's anti-money laundering laws. A Congressional aide, who did not want to be named, told Swiss Info that the Swiss delegates were 'not very convincing' when speaking on the subject of enforcing those particular laws. He explained: 'There was a tone of defensiveness in their presentation that put you on guard immediately and they gave no hard evidence that laws are being enforced. The big loophole is tax evasion which is not recognised as a crime in [Swiss] law on money laundering.'

Both the government and Swiss bankers are fiercely protective of their revered banking secrecy laws. Swiss Economics Minister, Pascal Couchepin, has reiterated his country's stance on several occasions and is adamant that Swiss secrecy laws do not hinder free trade and they are 'not negotiable'.

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