EU wants Swiss banks to drop secrecy - - - - - - - - - - - - By Jonathan Fowler Dec. 2, 2002 �|� BERN, Switzerland (AP) -- Swiss banking secrecy, epitomized by the legendary numbered bank account, is under attack. Again. Leading the offensive are Britain and its European Union allies, who want the Swiss to blow the whistle on wealthy EU nationals who put their money in Swiss accounts to dodge taxes at home.
But Switzerland, which sees itself as the victim of unfair pressure from the 15-nation bloc, is refusing to budge. Swiss officials argue that tough new laws passed in the 1990s mean secrecy is readily lifted and accounts are frozen in investigations into money laundering and terrorism. But while tax evasion is a crime in many EU countries, it is only an administrative offense in Switzerland. "We're prepared under certain circumstances to help our EU neighbors," said Swiss President Kaspar Villiger, who also acts as finance minister. "But we always start from the position that the citizen is basically honest and should be treated as such." Frustrated by failure to agree on common rules, EU finance ministers will meet Tuesday in Brussels, Belgium, to discuss possible measures against the Swiss government. The bloc wants Switzerland automatically to release information about deposits of EU nationals in Swiss bank accounts to prevent the collapse of an agreement among member nations to exchange information on cross-border savers. The EU plan, adopted in 2000 and due to come into force on Jan. 1, was to enable tax authorities in a depositor's homeland to levy taxes on any interest earned on the savings. However, Luxembourg, Austria and Belgium insisted that if they were to loosen their own bank secrecy laws, then non-EU countries like Switzerland and the United States would have to agree on similar measures. The EU has said it is close to a deal with the United States, but negotiations with Switzerland have deadlocked, jeopardizing talks with smaller tax havens like Liechtenstein, Monaco, Andorra, San Marino and the island of Jersey. Switzerland has made some concessions, offering to levy a 35 percent tax on the interest EU citizens earn on their savings in Swiss accounts and to pay part of the money directly to EU nations without revealing the account holder's identity. The Swiss also have offered to exchange information with EU authorities where there is evidence of serious wrongdoing such as money-laundering or fraud. But they reject the demand for an automatic information exchange. EU officials have hinted at possible sanctions against Switzerland -- such as breaking off negotiations on other areas like immigration, or restricting capital flows -- if there is no agreement. Villiger insists that Switzerland has done nothing wrong -- and that its banking secrecy is non-negotiable. "You can talk about sanctions against Saddam Hussein, or with regimes that don't respect international law," he said. "But Switzerland hasn't broken any laws." Swiss bankers were renowned for their discretion long before bank secrecy became law in 1934 to protect individual customers from prying authorities. The country's financial institutions handle more than a third of the world's private and institutional offshore funds -- money deposited outside the owner's home country. The financial sector, which employs more than 4 percent of the nation's labor force and accounts for 11 percent of gross domestic product, has warned that 20,000 jobs will go if it loses the competitive edge provided by secrecy. Swiss must approve major legal changes under the nation's cherished system of direct democracy, and officials say voters will never agree to end banking secrecy -- especially under foreign pressure. At the last referendum on the issue in the 1980s, two-thirds of voters opposed any loosening of the rules; the idea of doing so is one of the main reasons the Swiss aren't interested in joining the EU. But Switzerland, surrounded by the European Union, is heavily dependent on trade with its neighbors. Associated Press _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
