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Switzerland Ponders Case For Changing Bank Secrecy - Finance Minister
Tom Burroughes
6 March 2009
Hans-Rudolf Merz, the Swiss president, told reporters that the country's banking secrecy remained intact and that it respected privacy rather than protected fraud. "The Federal Council is currently considering the question of the distinction made between tax evasion and tax fraud," Mr Merz said, adding that
Swiss banks are forbidden by law to divulge information on clients unless it is suspected that a Swiss criminal law has been broken. Under Swiss law, tax fraud is a criminal offence, but tax evasion is not, although it can result in financial penalties. In jurisdictions such as the
Media reports did not elaborate on how Mr Merz or his government colleagues intended to resolve this issue. The country’s biggest bank and the world’s largest wealth manager, UBS, is locked in a legal wrangle with
The stakes for
Tax authorities are chasing undeclared wealth that is stashed abroad in a global crackdown on tax cheats, and in the process, are getting tough with secretive private banking sectors in places like
While so-called tax havens have come under noisier rhetorical assault and government pressure, defenders of low-tax jurisdictions with strict bank privacy laws argue that such places provide refuge not just for the wealthy, but also for groups fleeing oppression and government theft of their wealth. Bodies such as the US-based Cato Institute think tank also argue that tax havens provide countries with an incentive to keep their own taxes down, which boosts overall economic growth.