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Switzerland eases banking secrecy Switzerland eases banking secrecy
(40 minutes later)
Switzerland, the world's largest offshore financial centre, has agreed to accept concessions on bank secrecy.Switzerland, the world's largest offshore financial centre, has agreed to accept concessions on bank secrecy.
However, while it will now abide by international rules on bank data sharing, it said it would only respond to "concrete and justified" requests.However, while it will now abide by international rules on bank data sharing, it said it would only respond to "concrete and justified" requests.
The government added that it would still protect banking customers from "unjustified watching from abroad".The government added that it would still protect banking customers from "unjustified watching from abroad".
Switzerland's announcement comes after it had risked being added to a global blacklist of uncooperative tax havens.Switzerland's announcement comes after it had risked being added to a global blacklist of uncooperative tax havens.
This list currently comprises Andorra, Liechtenstein, and Monaco.
OECD talks
It is estimated that Switzerland's banks hold $2 trillion (£1.4tn) of global wealth held abroad.It is estimated that Switzerland's banks hold $2 trillion (£1.4tn) of global wealth held abroad.
OECD talks
The Swiss government has finally bowed to intense pressure from Washington and Brussels BBC Geneva correspondent Imogen Foulkes Clock ticking for Swiss secrecyThe Swiss government has finally bowed to intense pressure from Washington and Brussels BBC Geneva correspondent Imogen Foulkes Clock ticking for Swiss secrecy
It reached its agreement overnight with the Organisation for Economic Co-operation and Development (OECD), which sets rules on bank data sharing. It reached its agreement overnight with the Organisation for Economic Co-operation and Development (OECD), which sets rules on the sharing of bank data to try and crack down on offshore tax evasion.
This is the first time it has agreed to sign up to the OECD rules, having previously stated that it would compromise its long-standing banking secrecy principles.This is the first time it has agreed to sign up to the OECD rules, having previously stated that it would compromise its long-standing banking secrecy principles.
Andorra, Liechtenstein, Austria and Luxembourg have also just agreed to sign up to the OECD rules.Andorra, Liechtenstein, Austria and Luxembourg have also just agreed to sign up to the OECD rules.
All had come under increasing pressure to reform their banking sectors.All had come under increasing pressure to reform their banking sectors.
Andorra and Liechtenstein, along with Monaco, are currently on the OECD blacklist of "uncooperative tax havens".
Key global meetingKey global meeting
The agreements were announced ahead of a meeting of finance ministers and central bank governors from the G20 group of industrialised nations, which is due to start at a venue near London later. The agreements were announced ahead of a meeting of finance ministers and central bank governors from the G20 group of industrialised nations, which is being held near London.
WHAT IS A TAX HAVEN? Low or no taxationLack of transparencyRefusal to provide information to foreign tax authorities Source: OECD TAX EVASION v TAX FRAUD Switzerland is unusual is distinguishing between tax evasion and tax fraudTax evasion is the deliberate concealing of assetsTax fraud, in addition, involves lying on official documentsBoth are criminal offences in most countries, but tax evasion is only a civil matter in Switzerland
The meeting is likely to focus on the need for tougher regulation of banks, and discuss increasing funding to tackle the crisis. The meeting is expected to focus on the need for tougher regulation of banks, and discuss increasing funding to tackle the crisis.
UK Prime Minister Gordon Brown said the changes were "the beginning of the end of tax havens".
"Tax evasion, which costs the global economy billions of pounds each year, will become more difficult in future."
The Swiss government said in a statement that any exchange of banking information with other countries would be done on a "case by case" basis.The Swiss government said in a statement that any exchange of banking information with other countries would be done on a "case by case" basis.
It insisted that the acceptance of OECD rules would not affect the country's basic banking secrecy principles.
Switzerland was "maintaining banking secrecy and resolutely refused all automatic transmission of information", it said.Switzerland was "maintaining banking secrecy and resolutely refused all automatic transmission of information", it said.
"The private sphere of clients is still protected from unjustified watching from abroad," it added."The private sphere of clients is still protected from unjustified watching from abroad," it added.
Tax evasion changeTax evasion change
The Swiss government confirmed that in line with OECD rules, it would now respond to overseas requests for information in cases of suspected tax evasion, and not just tax fraud.The Swiss government confirmed that in line with OECD rules, it would now respond to overseas requests for information in cases of suspected tax evasion, and not just tax fraud.
WHAT IS TAX EVASION Tax evasion is the deliberate concealing of assetsTax fraud also involves lying on official documentsBoth are criminal offences in both countries, but tax evasion remains only a civil matter in Switzerland WHAT IS A TAX HAVEN? Low or no taxationLack of transparencyRefusal to provide information to foreign tax authoritiesAndorra, Liechtenstein, and Monaco classed as "uncooperative tax havens" Source: OECD
The main difference between tax evasion and tax fraud, is that the former is the deliberate concealing of assets, while the later also involves lying on official documentation. The main difference between tax evasion and tax fraud is that the former is the deliberate concealing of assets, while the later also involves lying on official documentation.
Unlike most countries, tax evasion is only a civil offence in Switzerland, and not a criminal matter. Unlike most countries, tax evasion is a civil offence in Switzerland. Only tax fraud is a criminal matter.
Imogen Foulkes, the BBC's Geneva correspondent, said "the Swiss government has finally bowed to intense pressure from Washington and Brussels".Imogen Foulkes, the BBC's Geneva correspondent, said "the Swiss government has finally bowed to intense pressure from Washington and Brussels".
"The decision is all about damage limitation - Swiss banks may well lose yet more wealthy international clients, but the government hopes its new willingness to cooperate in cases of tax evasion will lift the threat of the black list," she said."The decision is all about damage limitation - Swiss banks may well lose yet more wealthy international clients, but the government hopes its new willingness to cooperate in cases of tax evasion will lift the threat of the black list," she said.
"It's a small but very important change in Swiss banking regulations - and a little piece of Swiss tradition is now history.""It's a small but very important change in Swiss banking regulations - and a little piece of Swiss tradition is now history."
UBS rowUBS row
The Swiss government's acceptance of OECD rules is likely to have an impact on the continuing legal dispute in the US between UBS, Switzerland's largest bank, and US authorities.The Swiss government's acceptance of OECD rules is likely to have an impact on the continuing legal dispute in the US between UBS, Switzerland's largest bank, and US authorities.
US officials are continuing to demand that UBS hands over the details of 52,000 American account holders it suspects of tax fraud.US officials are continuing to demand that UBS hands over the details of 52,000 American account holders it suspects of tax fraud.
While UBS has given the US details of 300 American account holders, it has so far rejected a request to hand over details of all 52,000.While UBS has given the US details of 300 American account holders, it has so far rejected a request to hand over details of all 52,000.
The Swiss government said on Friday that it was in the process of drafting a legal statement to clarify its position regarding a civil case brought by US authorities against UBS.The Swiss government said on Friday that it was in the process of drafting a legal statement to clarify its position regarding a civil case brought by US authorities against UBS.
Switzerland said it would be drafting an "amicus curiae" or third-party statement to put forward its position in the matter.Switzerland said it would be drafting an "amicus curiae" or third-party statement to put forward its position in the matter.
It said it wished to give "added emphasis to Switzerland's sovereign interests".It said it wished to give "added emphasis to Switzerland's sovereign interests".
It is estimated that the US government loses $100bn in revenues every year because of tax havens.It is estimated that the US government loses $100bn in revenues every year because of tax havens.
Should banks face tougher legislation on data sharing? Does this compromise client confidentiality? Send us your views.
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Should banks face tougher legislation on data sharing? Does this compromise client confidentiality? Send us your views. Name