Relaxation of banking secrecy laws put on ice| MENAFN.COM

Monday, 08 August 2022 04:20 GMT

Relaxation of banking secrecy laws put on ice

(MENAFN- The Journal Of Turkish Weekly) Plans to change Switzerland’s banking secrecy laws have been temporarily shelved. The reforms would have made it easier for the Swiss authorities to get information from domestic banks about suspected tax evaders.

The cabinet said on Wednesday that the change of heart was due to the slim chance of success it believed the revision would have.

The project has been put aside for the time being according to the finance ministry.

The aim of the reform to the laws on fiscal offences was to stop tax evaders hiding behind the shield of banking secrecy. It would have enabled tax authorities to demand information from banks on account holders strongly suspected of tax evasion.

Part of the reason for the change of plan was criticism from the cantons. They feel they have been at a disadvantage since banking secrecy for foreign clients effectively came to an end. That happened after the United States Justice Department fined Swiss banks for helping American citizens evade taxes.

As part of a non-prosecution agreement with Washington Swiss banks have to disclose information about potential tax-related offences in connection with undeclared US-related accounts and pay any associated penalties.

Banking secrecy initiative

Presenting the initial reform plans more than two years ago Swiss Finance Minister Eveline Widmer-Schlumpf said that most Swiss citizens would not have been affected by the proposed reforms. She emphasised that tax evaders however should not benefit from banking secrecy.

A group which handed in signatures earlier this year for an initiative to enshrine domestic banking secrecy in the Swiss constitution said on Wednesday that the change of plan did not affect their wish to have the public vote on the issue.

The committee is made up of members of the conservative right Swiss People’s Party the centre-right Radical Party and Christian Democratic Party – as well as the Association of Small and Medium-Sized Enterprises and the Homeowners’ Association.

They want a court to decide whether private banking data should be released to the tax authorities in cases when there is a strong suspicion of tax evasion.

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