Switzerland 'Not Unwilling To Talk' On Banking Secrecy

by Ulrika Lomas, Tax-News.com, Brussels

10 May 2002

Responding to comments made by EU Internal Market and Taxation Commissioner, Frits Bolkestein at a press conference on Tuesday, the Swiss authorities have dismissed suggestions that they are unwilling to discuss banking secrecy, arguing that taxation talks must be part of wider negotiations on the other nine mandates.

'It's not true that we are unwilling to talk,' spokesman for the Swiss Foreign Ministry's Integration Office explained to the Swissifo news service on Wednesday. 'We just want negotiations on [other issues too]. The EU has known that since January.'

He added that: 'If the EU gets all the mandates we are ready and willing to start the next day. We are not trying to find an excuse, we are not trying to find an escape...Our goal is to have negotiations and to have successful negotiations.'

Speaking to reporters on Tuesday, at the end of a meeting of European Finance Ministers held here in Brussels, Mr Bolkestein expressed disappointment at the lack of progress in negotiations with Switzerland over the second set of bilateral treaties. He said that the talks with the Swiss authorities over the taxation of non-resident savings interest had been 'extremely difficult', and argued that while Switzerland remains 'unwilling to come to the table', other non-EU countries will refuse to take action, which could bring the entire initiative tumbling down.

Although the Swiss government has repeatedly stressed that the country's strict banking secrecy laws are 'not negotiable', the country has offered to impose a withholding tax on non-resident savings interest instead. However, this is an unacceptable solution for member states such as the United Kingdom, which believes that a withholding tax would threaten its lucrative bond market.

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