Austria, Luxembourg and Switzerland to change bank secrecy rules

Two EU countries and Switzerland announced on Friday (13 March) their intention to amend banking secrecy rules in an effort to alter perceptions that they facilitate tax evasion.

Austria, Luxembourg and Switzerland made the move following strong criticism from western governments that the existing rules support tax evasion. The rule changes guarantee cooperation with foreign tax authorities in cases where evidence of tax evasion can be provided. 

The three countries will now adopt the definition of tax evasion used by members of the Organisation for Economic Cooperation and Development (OECD). 

The rule changes will not affect account holders not under suspicion, according to the Swiss Bankers Association (SBA). “An automatic exchange of information is excluded”, the SBA said. 

International pressure 

The announcements come ahead of the London summit on April 2, where G20 leaders are expected to call for a crack-down on non-cooperating tax zones. It is expected that a decision will be made at the summit to compile a “black list” of tax havens. 

The three European countries have been under increasing pressure to reform as countries world-wide struggle to meet their fiscal obligations (EURACTIV 09/03/09). 

Peer Steinbruck, German Finance Minister, has also spoken out strongly on the issue, arguing that it is “unacceptable” for Germany that some European countries are welcoming tax evaders. 

Switzerland has been under particular scrutiny of late. The Swiss Bank, UBS, had to pay the US government $780 million to settle charges that it helped American citizens evade tax. 

The three countries feel that this step will be sufficient to quell the political pressure that they have been under. “The SBA now expects an end to all improper international criticism of Switzerland and its legal system and also an end to threats to put Switzerland on a so-called “black list””, said an SBA spokesperson. 

Call for action 

However, politicians from other countries remain skeptical. Peer Steinbruck told reporters at the G20 meeting of finance ministers that “there’s a difference between announcements, concrete agreements and measures backed by legal action.” While the Christine Lagarde, French finance minister, noted tellingly, that “the devil is in the detail”. 

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