Ministerial comments trigger angry response

Widmer-Schlumpf explains to journalists possible avenues to explore in the international fight against tax evasion Keystone

Hints by Finance Minister Eveline Widmer-Schlumpf about Switzerland’s willingness to discuss possible forms of an information exchange with the European Union over banking data have prompted heated reaction at home.

Her comments, made during a news conference last Thursday to look back over her year as Swiss president, have unleashed protests by centre-right and rightwing parties as well as scepticism by the Swiss Business Federation.

However, centre-left parties and a senior European Union representative have welcomed Widmer-Schlumpf’s statement according to newspaper reports.

Richard Jones, EU ambassador to Switzerland, told the NZZ am Sonntag newspaper, Widmer-Schlumpf’s comments appeared to confirm a change in attitude among opinion makers and business leaders.

“It is certainly a positive signal. It may be in response to global developments because the trend on an international level is towards an automatic exchange of information,” Jones is quoted as saying.

He dismissed allegations that the EU considered Switzerland as a country which is caving in under pressure.

“Switzerland is closely linked with the international community. In most cases the country knows how to adapt to international developments as seems to be the case now,” he added.

Last week, Widmer-Schlumpf held talks with her counterpart, Luc Frieden, in Luxembourg, until recently an ardent supporter of banking secrecy. After a meeting both politicians indicated that new forms of cooperation on banking data with the United States were necessary.

Easing banking secrecy

In a bid to avoid being blacklisted, the Swiss government in 2009 agreed to adopt OECD rules to fight tax evasion.

In 2012 Switzerland approved revised tax accords with Britain and Austria.

A similar deal with neighbouring Germany failed amid opposition in the German parliament.

Negotiations are underway for an accord with Italy and Greece to do away with untaxed assets.

Switzerland also agreed in principle to a deal with the US to implement the Fatca – regulations on tax compliance of foreign accounts held by American citizens.

Uproar

On the domestic scene, Widmer-Schlumpf faces harsh criticism by the leaders of the Radical Party and the Swiss People’s Party.

They want the tax dossier to be handed over to another government ministry in an apparent sign of no-confidence in the finance minister.

The director of the Business Federation, Pascal Gentinetta, said he was “extremely surprised” about Widmer-Schlumpf’s statements.

It is up to the whole seven-member cabinet to ensure the best possible defence of Switzerland’s interests, he told the SonntagsZeitung newspaper.

The Social Democrats for their part have reportedly called for the resignation of the secretary of state in the finance ministry, Michael Ambühl, accusing him of being too lenient with the banks.

Concessions

Widmer-Schlumpf on Thursday said Switzerland was willing to open discussions with Brussels on possible limited forms of a banking data exchange if it secures concessions in return, such as better access for non-EU member Switzerland to the financial market of the 27-nation bloc.

However, she said an automatic exchange of an information made “no sense and would be unacceptable for us.”

She said it was a matter of defining what data is needed to combat tax fraud and tax evasion on an international level.

“The question is what kind of information would have to be exchanged. Could it be details about income on interest [on assets in Swiss banks]. Or would it go beyond that? The time is right to discuss these issues,” she said.

Banking secrecy

Switzerland has come under increasing international pressure to ease its banking secrecy rules.

In 2009 it accepted the standards of the Organisation for Economic Co-operation and Development (OECD) to crack down on suspected tax cheats.

In a bid to steer clear of an automatic exchange of information of banking data, Switzerland has amended a series of tax agreements with other countries to ensure no untaxed assets are deposited in Swiss banks.

However, a landmark deal with neighbouring Germany fell through earlier this month amid opposition by leftwing opposition parties in the German parliament.

In another development, the Swiss government agreed to an accord with the US authorities to implement measures to track down American citizens suspected of stashing away untaxed money in Switzerland.