Global standards demanded for data exchange

The Swiss cabinet says it wants to take an active role in developing global standards for the automatic exchange of banking information to avoid clashes with other countries over tax issues.

The Swiss cabinet says it wants to take an active role in developing global standards for the automatic exchange of banking information to avoid clashes with other countries over tax issues.

The move confirms a statement made by Finance Minister Eveline Widmer-Schlumpf last December, but stops short of scrapping banking secrecy.
 
At a news conference in the Swiss capital Bern on Friday, Widmer-Schlumpf said such global rules by the Organisation for Economic Co-operation and Development (OECD) would have to be sustainable, guarantee reciprocity and be in line with data protection.
 
She said the cabinet had made a first evaluation of a report on the future of Switzerland’s financial market. A formal response will be issued in September.
 
«We have not had enough time to examine the report in detail,» Widmer-Schlumpf told reporters.
 
She strongly rejected allegations that the government has taken a first step towards abolishing Switzerland’s cherished banking secrecy.
 
Such fundamental decisions would have to be taken by parliament and voters, she argued.
 
Friday’s statements came ahead of a special debate in parliament next week to discuss a strategy for Switzerland financial market policy.

US and EU

Widmer-Schlumpf said the government stance was not directly related to another hot issue to be discussed in parliament next week: a proposed deal between the United States and Swiss banks suspected of helping tax cheats hide their money.
 
However, she acknowledged that the different issues were easily mixed up.
 
Widmer-Schlumpf added she was waiting to see the detailed proposals from the European Union on adapting a bilateral tax accord before saying if cabinet was willing to enter discussions on an automatic exchange of information with the 27-nation EU.
 
Continuing the Swiss system offering a withholding tax on foreign assets in Swiss banks without revealing the names of beneficiaries is still an option, she explained.
 
EU tax commissioner Algirdas Semeta is due in Bern on Monday for talks about the introduction of an automatic exchange of banking data with Switzerland.

Strategy report

The study by group of experts led by Aymo Brunetti, and presented on Friday, recommends Switzerland abandons the withholding tax system for foreign asset management clients and seeks a global solution based on an automatic exchange of information.
 
«The aim is to achieve a sustainable international acceptance and long-term legal security for Switzerland,» he told journalists.
 
Countries which do not apply international OECD standards could still be offered a withholding tax system and additional information if specifically requested, Brunetti said.
 
Political parties gave the report mixed marks.
 
The centre-right Radical Party, which is traditionally close to the business community, said the cabinet had blocked plans by the political left for a fundamental strategy change. It called on the government to stick to the system of withholding taxes.
 
The centre-left Social Democrats welcomed the findings of the report but criticised the cabinet stance as half-hearted.
 
The rightwing Swiss People’s Party accused the government of paving the way for the abolition of banking secrecy. It said the cabinet was weakening Switzerland’s position in international negotiations.
 
The non-governmental Berne Declaration said the cabinet had taken a historic step and accepted the automatic exchange of information in principle, finally giving in to unavoidable.

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