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Swiss Private Bankers Stand Firm Against EU Demands On Secrecy But Call For Compromise

Ulrika Lomas, Tax-News.com, Brussels

09 February 2001

At a press conference held this week in Zurich, the Swiss Bankers Association (SBA) squared up to the European Union by reiterating its commitment to maintain Switzerland's revered banking secrecy rules.

Last month, at a meeting of the Ecofin Council, Sweden's Finance Minister Bosse Ringholm confirmed that the EU had written to Switzerland asking for a start to be made on negotiations (to which EU members committed themselves in December) to develop the information-sharing regime on savings instruments and assets belonging to EU nationals.

At the time a number of very discontented private bankers across Switzerland called upon the government and the SBA to stand firm against the EU. Finance Minister Kaspar Villiger and Economics Minister Pascal Couchepin insisted that the government would support the banks, with Mr Couchepin saying 'banking secrecy is not negotiable.'

Speaking at this week's news conference, the SBA’s chairman, Georg Krayer, described the EU's overtures as 'all too transparent demands' and said Switzerland must safeguard its interests as a financial centre. He said: 'We are not prepared to accept… demands which impose unnecessary administrative burdens or simply do away with the respect, developed over centuries, for our clients’ right to privacy in money matters.' He also accused the EU's demands of being 'motivated by a desire for competitive advantage.'

However, he conceded that the EU's concerns were legitimate and called for a compromise between Switzerland and the EU that would allow the jurisdiction's banking secrecy to remain intact: 'We do acknowledge the EU's aim to keep a significant part of taxable funds within its borders, but we think there is room for a solution on common ground,' he said.

Chief executive designate of the association, Urs Roth, explained that tax evasion in Switzerland was prevented to a significant degree via the witholding tax which makes certain that taxes can be collected at the same time as keeping the individual's rights of privacy. He said a compromise could be reached in this respect: 'By modifying the existing withholding tax, it would be possible to introduce in Switzerland a measure for the prevention of tax evasion deemed equivalent by the EU.'

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