Austria And Switzerland Take Stand Against Loss Of Bank Secrecy

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Austria And Switzerland Take Stand Against Loss Of Bank Secrecy

The Austrian parliament has failed to approve a resolution relaxing the country’s strict banking secrecy laws, for which a two-thirds majority was required. The ruling Socialists and conservatives were unable to secure the support of any of the opposition parties. The question now being asked is whether the Swiss government will gain the support of parliament and people when it comes to ratifying its own tax treaties , which dilute longstanding bank secrecy laws.

The Austrian resolution has been sent back to committee and now will not be adopted before the autumn, since Parliament has begun its summer recess. Until early this year, Austria had only supplied bank data on non-resident accounts when criminal procedures had been launched against an individual and a court order had been issued. More recently Austria has been under pressure from EU countries and the OECD to sign a series of bilateral agreements in an approved standard OECD format which forces a relaxation of bank secrecy laws.

Meanwhile in Switzerland the Justice Ministry has warned that it would take control of the information rather than allow Swiss bank UBS to hand customer information over to the US authorities. A filing to the Miami court stated that Switzerland would use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS. The US Department of Justice (DoJ) and the Internal Revenue Service (IRS), are demanding the identities of 52,000 UBS clients whom they suspect of illegally evading US taxes.

At some point the Swiss parliament and people will have the opportunity of expressing their opinions on OECD pressure to sacrifice bank secrecy in order to deliver tax transparency. Whilst the Swiss government has already conceded this point and by the end of September will have signed 12 Tax Information Exchange Agreements, in order to ratify these agreements it is constitutionally required to consult with Parliament as to whether a referendum needs to be held. Swiss President Merz already proposes to subject the first treaty to a people’s referendum and all remaining treaties will need to be approved by a majority in parliament at the very least. In an interview with the Swiss Radio DRS, Merz indicated that the first tax treaty to be put to the full referendum would be the Swiss-Japanese TIEA, since Japan was a major economic power and trading partner with whom Switzerland had no disputes up until now.

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Article Source:http://www.articlesbase.com/banking-articles/austria-and-switzerland-take-stand-against-loss-of-bank-secrecy-1117027.html

UBS Case: U.S. Wants Data on Secret Swiss Bank Accounts (time.com)
Swiss: UBS Case Jeopardizes NEW US Tax Treaty Talks (huffingtonpost.com)
Switzerland thwarts US tax deal (news.bbc.co.uk)
UBS, U.S. settle tax evasion case (financialpost.com)
UBS settles tax evasion case (money.cnn.com)
Swiss banks favor secrecy over U.S. clients (dailyfinance.com)
Switzerland strikes tax deal with U.S. (financialpost.com)
Taking On UBS: The Fight Over Secret Swiss Bank Accounts (time.com)
U.S. vs. UBS: A Fight Over Secret Swiss Bank Accounts (time.com)
U.S. tax deal with UBS hits snag (financialpost.com)

Tagged with: Austria, Banking in Switzerland, Business, Internal Revenue Service, Switzerland, U.S. Justice Department, UBS AG, United States Department of Justice

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