Switzerland And The EU To Begin New Bilateral Talks

by Ulrika Lomas, Tax-News.com, Brussels

05 July 2001

Switzerland and the EU are likely to announce today that they will commence a new set of talks aimed at extending the seven bilateral treaties signed last year which dealt with such issues as the free movement of people and transport rights.

The new set of accords to be negotiated are likely to include a number of issues left over from the previous round of talks, including agricultural production, the media, statistics, the environment and the double taxation of pensions. The Swiss are also keen to join the Schengen agreement, which abolishes border controls between its members, and the Dublin accord, which deals with visa policies for Schengen members.

But the joker in the pack is the EU's attempt to get Switzerland to provide information on Swiss bank accounts held by EU citizens. The Swiss have repeatedly refused to consider compromising banking secrecy in any way, offering instead to extend and reinforce their existing withholding tax on income from savings and investments. This is not enough for the EU, which under the Feira agreement has until the end of 2002 to get agreement on information-sharing from Switzerland, the US and a number of key tax havens if its own information-sharing regime is to have any chance of success.

The previous set of bilateral accords, although signed, still need to be ratified by six of the EU’s member parliaments, including that of Belgium, which currently holds the Union’s rotating presidency. Last month, Brussels assured the Swiss foreign minister, Joseph Deiss, that Belgium would ratify the accords by November, and support Swiss efforts to forge new agreements.

Within Switzerland there is growing impatience at the delay in ratifying the accords, which were expected to come into force this year. Switzerland has already implemented its commitments, such as abolishing a weight limit for lorries. There has to be a suspicion that some EU countries are deliberately holding up the ratification process in order to put pressure on Switzerland to give ground on the banking secrecy issue.

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