Switzerland, the world’s largest offshore wealth center, worth an estimated $2.2 trillion in assets, has signed an agreement to share financial information with nearly 60 other countries, which could completely change the country’s financial landscape.
The country has made a giant leap towards banking transparency after it signed a convention with the Organization for Economic Cooperation and Development (OECD) agreeing to exchange data with 60 member countries.
Switzerland already has bilateral tax collection agreements with the UK and Austria, but the move to chip away another layer of the country’s infamous banking secrecy was prompted by international pressure from the US, Germany, and France,
The tax agreement, called the Multilateral Convention on Mutual Administrative Assistance on Tax Matters came into force in 2010, and includes all G20 states, and most European states. The convention requires participants to pool tax collection information, and includes automatic exchanges, in some cases.
Under the convention, the Swiss government can call on large private banks like UBS AG, Julius Baer, and Credit Suisse Group AG to turn over confidential information to international tax watchdogs.
“The signing of the convention confirms Switzerland’s commitment to the global fight against tax fraud,” Stefan Fluckiger, the Swiss ambassador to the OECD, said in a statement adding his country has been complying with international tax standards since 2009.
The Swiss Federal Council approved the convention on October 9, the first unilateral agreement for the nation that signals the state is prepared to play a larger role in upholding international tax rules.
Until recently, the Alpine tax haven refused steps towards banking transparency, and over the summer, the Swiss parliament struggled to pass a bill to change the banking legacy., but finally agreed to comply with the US Foreign Account Tax Compliance Act, a bilateral client information swap with the US.
Almost all bankers in Switzerland have grown up with bank secrecy, which was written into Swiss law in 1934 after French authorities arrested, and confiscated a client list from two Swiss bankers in Paris in 1932.
Full article: Game changer: Swiss banks ditch secrecy (Russia Today)