• News
  • Education
  • Regulation
  • Resources
  • Fintech
  • Regtech
Search
Hedge Think – Digital meeting place for fund managers and investors
  • News
    • Woman Typing
      News

      How Do Journalists Write News so Fast?

      News

      Atypical Partner Sets Up “Launching Platform” For Next Generation Of Financial…

      News

      Luxrobo Wins Worlddidac Outstanding Award 2020 For ‘Modi’

      News

      The Benefits of Signage for Your Business

      News

      Custom signage: A Tool for Business Recognition

  • Education
    • Education

      What Are The Top Leading Educational Health Programs In 2021?

      classroom
      Education

      7 Courses Every Teacher Need To Know

      graduation
      Education

      Top Subjects to Study When You Don’t Know What Career to…

      Education

      How to Ensure Web Accessibility for Educational Websites and Resources?

      Coach
      Education

      How To Become The Perfect Educational Coach For Your Children

  • Regulation
    • Regulation

      Brexit & AML Directives: We’ve Now Left The EU, But Have…

      Regulation

      Gibraltar Modernises Limited Partnerships Law For Booming Funds Industry

      Regulation

      Isle of Man Financial Services Authority Publishes Perimeter Guidance On Crypto…

      Regulation

      Investors Seek to Reverse SEC Rule to “Turn Back the Clock”…

      Regulation

      4 Mistakes Many College Students Make & How to Prevent Them

  • Resources
    • bitcoin
      Resources

      Guides To Open Bitcoin Wallet Account

      Resources

      Understanding the Different Types of Managed IT Services

      investing

      Four Trending Business Investment Opportunities in China for UAE Entrepreneurs

      Resources

      6 Non-Traditional Careers to Change Up and Challenge Your Future

      Hand shaking lawyers
      Resources

      Why Do You Need To Hire A Lawyer After A Car…

  • Fintech
    • fintech

      Global Digital Transformation openbusinesscouncil Summit And Awards To Recognize Outstanding Companies…

      fintech

      Top Investment Ideas To Watch: PayPal Holdings And China Merchants Bank…

      Financial Industry

      Fintech In The UK In 2021: Industry Forecast Amidst Brexit And…

      fintech

      PayFuture AI And Deep Learning Tech Opens A World Of Opportunities…

      fintech

      Building Bahrain Fintech Ecosystem: Interview With Khalid Saad

  • Regtech
    • Financial Industry

      RegTech, Why It Is Important For FinTech And Financial Services Firms…

      Regtech

      Credorax Partners with Feedzai for Innovative Anti-Money Laundering Solution

      Financial Industry

      London Forum Brings Together Top Experts To Discuss Climate Risk And…

      latest

      Legal Departments Face Increasing Work Demands While Trying To Adapt To…

      blockchain

      Crypto And Anti-Money Laundering Compliance: Chamber’s Token Alliance Addresses AML Regulation…

Swiss banking secrecy under pressure from US

By
Dirk De Wolf
-
June 2, 2014
Share
Twitter
Facebook
Linkedin
Pinterest
Telegram
WhatsApp

    swiss-bank-hedgethink

    For over a century Switzerland has developed its secure banking system around its commitment to privacy protection. Due to banking secrecy and lack of information exchange, Swiss banks have acted as tax havens and allowed for US firms and individuals to commit tax evasion. This fact has resulted in a number of different attacks against Swiss sovereignty.

    Background of Swiss banking secrecy

    Swiss banking secrecy is the legal principle under which Swiss banks are allowed to protect personal information about their customers. Swiss law (Banking Act of 1934) strictly limiting any information shared with third parties, including tax authorities, foreign governments or even Swiss authorities, except when requested by a Swiss judge’s subpoena.

    Key issues:

    • Covers all business relations with the bank
    • Not limited in time
    • Concerns all the people who work for the bank
    • Key provisions:
    • Regulated by both civil law and criminal law
    • Privacy is statutorily enforced
    • Reveal equals imprisonment of 6 months or 50,000 francs
    • Negligence equals 30,000 francs

    The debate on the future of Swiss banking secrecy is a key issue in Swiss politics. Whereas left-wing parties such as SP advice the automatic exchange of information, at least with the countries of the European Union. SVP clearly defends the remains of Swiss banking secrecy. SVP reminds the other political parties and the Swiss population of the benefits of Swiss banking secrecy and points to the disturbing facts that, opposed to what’s proclaimed, there is absolutely no such thing as a level playing field. One just has to take into consideration the examples given of the US or the Channel Islands. Singapore is another example of a financial place, that directly profits from the international pressure on Switzerland. Parties in the middle of the political spectrum (FDP, BDP, CVP) vary from time to time depending on the issue.

    US Strategy

    – Unilateral pressure

    US is imposing unilateral laws on the entire World, such as FATCA, which seeks to coerce Foreign Financial Institutions into acting as deputies for the IRS. The primary goal of FATCA is simple: raise revenue. Investigating foreign banks is a time consuming task often revealing limited relevant information and recovering only a fraction of lost tax revenue.

    – Bilateral pressure

    US has initiated actions that specifically target Switzerland, such as legal attacks on individual institutions and pressure for tax agreements.

    Due to banking secrecy and lack of information exchange, Swiss banks have acted as tax havens and allowed for US firms and individuals to commit tax evasion.

    US – Swiss Tax Treaty: revised existing treaty based on the rules set out by the OECD Model Tax Convention (art. 26). It allows for greater information exchange. But there is still room for more improvements (automatic exchange of information). When making a request under the new treaty, requesting state must still provide ‘information sufficient to identify the person under examination or investigation’.

    – Multilateral pressure

    • US is actively supporting the anti-tax competition project of the OECD.
    • Model Tax Convention
    • Global Forum on Taxation

    The Global Forum brings together jurisdictions, both OECD and non-OECD, that have made commitments to transparency and exchange of information and have worked together to develop the international standards for transparency and exchange of information in tax matters. The Global Forum is mandated to ensure that all jurisdictions adhere to the same high standard of international cooperation in tax matters.
    Tax Information Exchange Agreements

    Conclusion

    Some political parties, like the SP, have always been warning that the Swiss institute of “banking secrecy” which protects the black money of tax evaders and other criminals and potentates is not a sustainable business model. International acceptance of Swiss laws is crucial for a sustainable development of the Swiss financial market place. In view of the actual international crisis of the public finances, the Swiss policy of tax dumping and protection of tax evaders is not rational but stupid. Swiss economic depends highly on European and world economic. Worldwide sound public finances are the base for a sound world economy. Therefore it isn’t astonishing that the international community has increased the pressure on Switzerland to stop harmful tax practices. What is needs is a coordinated international policy to eliminate harmful tax practices worldwide.
    FATCA legislation is likely to have a significant impact on international banking secrecy laws. While the mandatory disclosure requirements will hinder Swiss banks ability to help clients evade their tax responsibilities, it likely doesn’t spell the end for Swiss banking generally.

    Avatar
    Dirk De Wolf

    Dirk De Wolf is a writer and blogger from Aalst, Belgium. He has an BSc in Political Science and an MSc in EU-Studies from the University of Ghent. Dirk wrote his master

    Dirk De Wolf

    RELATED ARTICLESMORE FROM AUTHOR

    Regulation

    Brexit & AML Directives: We’ve Now Left The EU, But Have You Read The Small Print?

    Regulation

    Gibraltar Modernises Limited Partnerships Law For Booming Funds Industry

    Regulation

    Isle of Man Financial Services Authority Publishes Perimeter Guidance On Crypto Assets And Tokens

    MOST POPULAR

    What Has Changed in China’s Onshore Stock Market?

    March 11, 2019
    multiplay market

    Telecom Market: North America Leads The Multiplay Services With Over 142...

    February 5, 2019
    ecb meeting

    Experts Warn: The ECB Isn’t ‘In A Rush’ Despite The Biggest...

    January 25, 2019

    5 Great Apps For Business Travel

    January 2, 2020
    Load more

    HOT NEWS

    Regulation

    Jury: Swiss Banker Not Guilty of Aiding Tax Evasion

    Resources

    World’s Top 10 Hedge Funds

    Resources

    UK Fintechs Ebury and MarketFinance partner to speed up CBILS access...

    Industry

    Vast Majority of Insurers are Confident in Fund Managers’ Navigation of...

    Companies are modernizing their strategies for 2021. Since crypto is growing, we were involved in investigating more about bitcoin casino. We reached out to Rocketpot.io. This bitcoin casino explained to us all about the blockchain and why their clients prefer using crypto instead of relying on payment service providers. They gave us an insight into the crypto casino scene.

    Hedgethink
    ABOUT US
    HedgeThink is a primary destination for alternative investors and hedge funds. HedgeThink.com is a digital meeting place for fund managers and investors all over the world. Our focus is firmly on thought leadership, technology, and where the industry is headed. Encouraging transparency, and fostering dialogue between hedge funds and accredited investors, HedgeThink.com is where anyone with an interest in fund creation and management can find everything they need to research and make the best investment decisions.
    Contact us: hedgethink@ztudium.com
    FOLLOW US

    OUR NETWORK

    © copyright 2021 - IntelligentHQ proudly powered by ztudium