Thursday, Feb 09th

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European states keep Swiss bank secrecy under siege

BERNE/AMSTERDAM--European states lined up behind German Chancellor Angela Merkel to expose tax cheats in a combined assault on the Swiss banking secrecy laws that help protect them.

  German Finance Minister Wolfgang Schaeuble sent shivers through the large Swiss private banking industry this week when he said Berlin was prepared to pay for stolen data belonging to potential tax cheats at a Swiss bank, raising the bar in the fight against tax evasion. Now, the Dutch, Belgian and Austrian governments have also flagged interest in obtaining a copy of a compact disc with tax-sensitive data that Berlin may soon buy from an informant.

  Swiss Finance Minister Hans-Rudolf Merz said on Wednesday the Swiss would not help Germany or others hunt tax cheats on the basis of stolen Swiss bank data, but tried to defuse the escalating row by saying Berne would not retaliate.

  "It is obvious that such a theft is a criminal act," Merz said. "Switzerland should therefore not offer administrative (tax) assistance in such cases either now or in future."

  But he added that Switzerland would continue to engage in talks aimed at signing a new treaty with Germany.

  Coordinated action by European governments poses a serious headache for Merz at a time when Berne is struggling to honour a deal with Washington to end a tax row against UBS. Merz came under pressure to resign last year for his handling of the UBS case.

  Switzerland, which remains under siege as the world's top offshore centre despite having promised to relax bank secrecy, has named seasoned diplomat and UBS dealmaker Michael Ambuehl to a new tax job to help it defuse the many tax spats it faces. Merkel's chief of staff, Ronald Pofalla, called for both sides to show good sense.

  "A sensible solution is in our interests," Pofalla told German Bild daily, adding talks between Berlin and Berne were taking place in an atmosphere of trust.

  However, he stuck to Germany's position that if officials found the data would lead them to a large number of tax cheats, the state would do what it could to get hold of the information. Many European governments are under pressure to raise tax revenues after injecting billions of euros into several large banks to fight the financial crisis.

  A Dutch finance ministry spokesman said the Netherlands, where deputy finance minister Jan Kees de Jager is pushing through a crackdown on tax dodgers, told Berlin they would be interested in having any data on Dutch taxpayers. Austria, which protects its own bank clients with secrecy rules, also showed an interest.

  "Should there be evidence that the CD (with the stolen bank data) contains information on Austrian taxpayers, we would naturally have great interest in analysing those," a spokesman for Austrian Finance Minister Josef Proell was quoted as saying in Der Standard newspaper.

  Belgian newspaper De Standaard said Belgium, which is giving up banking secrecy, also wanted copies of the Swiss data if Germany got them. The finance ministry declined to comment.

  Former German Finance Minister Peer Steinbruck repeatedly accused Switzerland of helping tax evaders and was likened to a Nazi by one Swiss parliamentarian after he compared Swiss politicians to "Indians" running scared from the cavalry.

  Switzerland promised in March to sign a raft of new tax treaties to avoid ending up on an global blacklist. But it still needs to seal tax deals with large neighbours Italy and Germany.

  Nearly $6 trillion of wealth is managed in Switzerland, with potentially almost one-third of it undeclared, analysts have said. Bankers fear the latest set of attacks could undermine the country's entire private banking model.

  Several European governments have tried to lure back some of the money hidden in tax havens by launching tax amnesties. Wealthy Dutch savers last year declared 2.15 billion euros ($3.01 billion) under a penalty-free amnesty, with a third of the declared accounts hidden in Switzerland.

  Britain has also targeted wealthy residents with hidden offshore money via a so-called voluntary disclosure programme. The most successful amnesty so far has been a Italian one, which recouped nearly 100 billion euros in three months, most of it hidden in the Italian-speaking Swiss canton of Ticino.

  France and Germany, on the other hand, have not launched amnesties but have accepted stolen bank data from informants.

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Thursday Feb. 09, 2012
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