Swiss Minister Squarely Behind Banking Secrecy

by Ulrika Lomas, Tax-News.com, Brussels

02 April 2002

In reported remarks, Swiss Economy Minister Pascal Couchepin reiterated his support for banking secrecy, saying that Switzerland's financial centre was feeling "the wind of competition", but that it would not lift the privacy laws which have helped it to become the home of a third of the world's offshore wealth.

"We feel that competitors would like to reduce the importance and the advantages of the Swiss financial centre which are based on the quality of the services on offer," Mr Couchepin said.

"Switzerland is not an offshore centre or a tax haven," he said, in response to worries that the Organisation for Economic Co-operation and Development would target Switzerland in its battle against tax evasion. "Switzerland is not a fiscal paradise. The overall tax burden is in effect higher in Switzerland than in the United States, and Switzerland also co-operates very efficiently in the fight against crime and tax fraud."

Nonetheless, the OECD does have to try to increase transparency in Switzerland and other financial centres if it is to be able to make use of the commitment letters it has received from more than twenty offshore jurisdictions, all of which are explicitly linked to changes in competitor countries such as Switzerland.

A number of EU leaders support the campaign against Swiss banking secrecy because of the EU's Savings Tax Directive, which will fail is Switzerland doesn't budge. Mr Couchepin's Italian counterpart Giulio Tremonti for instance reportedly the practice would disappear by the end of this year (the deadline for non-EU countries to come into line with the EU's information exchange proposals).

"History will say who was right. I forecast that bank secrecy will not disappear," Mr Couchepin said. Swiss bank secrecy is waived in criminal cases but this does not extend to tax evasion, which is not a criminal offence in Switzerland.

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