#bankingsecrecy

[lawofsecrecy]

Switzerland Signs Deal to End Banking Secrecy

Under pressure from other countries, the U.S. included, Switzerland has agreed to an international agreement with the Organization for Economic Cooperation and Development (OECD) that would open up data exchange with 60 other countries. Proponents hope the deal will put an end to banking secrecy and tax evasion. The International Banker reports, however, that the transition may not be a smooth one.

The Swiss banking industry which has reached $8.5 trillion in offshore wealth will have to adapt to these changes. The secrecy was one of the most important attractions for depositors and foreign bank assets have decreased by $921 billion in the last four years as a result of fears that this secrecy would soon be compromised.

The US has had a long standing problem with this secrecy since UBS, Switzerland’s biggest bank, in 2009, admitted that it had helped 52,000 Americans evade taxes. Since then, another bank, Wegelin & Co. has also admitted to helping clients hide money including $1.2 billion from American sources. The IRS and the US government are reported to be investigating over a dozen Swiss banks.

[lawofsecrecy]

Swiss Banker Convicted For Passing Client Data to WikiLeaks

Mr. Elmer, 59 years old, told The Wall Street Journal in an interview shortly before his recent trial began that the two compact discs he handed over to [WikiLeaks' Julian Assange] at the 2011 news conference didn’t contain any sensitive data. He said that he merely wanted to draw international attention to his legal troubles in Switzerland, and to his continuing efforts to criticize bank secrecy as a means to enable tax evasion.

Following his dismissal from Julius Baer more than a decade ago, Mr. Elmer returned to Zurich with a cache of the bank’s client data he says he had taken home as part of standard-security procedure, and never returned. He sought with limited success to provide the data to Swiss-tax authorities and Swiss media, he has said, arguing that the information reflected the aiding of tax avoidance and evasion for clients.

In 2008, Mr. Elmer’s data appeared on WikiLeaks, which had only recently been started. Julius Baer filed an unsuccessful bid with a U.S. court to have the material removed from the site.

Mr. Elmer has previously been jailed twice for his efforts to disperse Julius Baer’s data, and at one point was placed under surveillance by private investigators.

[lawofsecrecy]

51 Countries Sign International Agreement to End Banking Secrecy

In what is being heralded as a triumph for transparency advocates, an international agreement requiring cross-border disclosures of foreign account holders was signed by representatives of 51 countries today in Berlin, Germany.  The multilateral agreement comes as the United States Internal Revenue Service continues to demand information disclosures from banks in countries with traditionally privacy oriented banking structures, such as Switzerland; neither the U.S. or Switzerland were signatories to today's agreement.  Reuters reported on today's summit and quoted Germany's finance minister as saying:

The pledge from so many countries -- Schaeuble said there were 51 signatories from four continents, after one country joined at the last minute -- is the result of years of OECD efforts to facilitate tax authorities' access to bank data.

OECD Secretary General Angel Gurria said the taxation deal should "help to recover the trust the public today has lost" during the global financial crisis and economic downturn.

"Tax evasion is not just illegal, it is immoral," Britain's finance minister, George Osborne, told a news conference by the ministers. "You are robbing from your fellow citizens and you should be treated like a common thief."

Schaeuble had told German newspaper Bild before the talks that the OECD agreement was making tax evasion more difficult, adding: "Banking secrecy in its old form has had its day."

The European Union has enforced the automatic exchange of interest income since 2005 and America's Foreign Account Tax Compliance Act (FATCA) has required non-U.S. institutions to provide U.S. tax authorities with data on accounts since 2010.

The United States was not a signatory in Berlin. Gurria said it was having its own internal debate on taxes, but was a "very strong supporter of everything we are doing".

He added that Switzerland was part of the process but was not one of the 51 states which had agreed to be "early adopters" before the 2018 deadline.

[exitstrategyeditorial-blog]

Tax Havens in Peril: Brits Take Aim at Overseas Territories

Bermuda, Anguilla, British Virgin Islands, and other British overseas territories have agreed to take part in the automatic exchange of personal bank information with several EU countries. (www.europeanvoice.com)

[mpdwrites-blog]

Another great story from the folks at Reuters. Heather Lowe talked Brian Grow through much of the background on this piece, and while we don't get a quote in this latest installment, we are thrilled to see this issue finally being fleshed out in the detail and scope needed to do it justice. Three cheers to Reuters and eyes glues to the wire for the next installment.