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Switzerland's Private Bankers Defy European Union Over Secrecy Rules

Ulrika Lomas, Tax-news.com, Brussels

22 January 2001

Last week, at a meeting of the Ecofin Council, Sweden's Finance Minister Bosse Ringholm said that the EU had written to Switzerland asking for a start to be made on negotiations to develop the information-sharing regime on savings instruments to which EU members committed themselves at the close of the French presidency in December. The EU's agreement to share information is conditional on reaching a similar agreement with Switzerland, the US, and a number of offshore jurisdictions including Liechtenstein, Andorra and the UK's dependent territories.

The EU's move has caused major discontent amongst members of the Swiss Private Bankers Association, who have warned that a hasty relaxation of the country's renowned banking confidentiality laws could spell disaster for the banking system. Last week Jacques Rossier, an associate with Darier Hentsch & Cie, told the Swiss media: 'It would be totally unreasonable for Switzerland to drop its bank secrecy as a good will gesture in the forthcoming negotiations with the EU, whilst other financial centers, especially the United States and Britain, continue their own self-serving tax policies.'

Geneva is the leading private banking centre worldwide. The 15 members of the Swiss Private Bankers Association currently deal with approximately 400bn Swiss francs ($250bn). In defending banking banking secrecy, Mr Rossier said that Switzerland possessed some of the toughest regulations in the world in the fight against organised crime.

Calls from anguished bankers urging the Swiss government to resist the European Union's overtures are coming thick and fast, while Finance Minister Kaspar Villiger and Economics Minister Pascal Couchepin insist that the government would support the banks, with Mr Couchepin saying 'banking secrecy is not negotiable.'

Despite claims to have cleaned up its image as a haven for money laundering, Switzerland continues to be the focus of much media attention, particularly over the Abacha scandal, which followed the discovery of deposits of more than US$600m in Swiss bank accounts belonging to the late Nigerian dictator General Sani Abacha. Concerns were also raised over the US$70m shielded in Switzerland by ex-spy chief Vladimiro Montesinos.

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