Switzerland’s bank lobby decries regulation “overload”
The Swiss Bankers Association (SBA) has waded into the ongoing anti-tax evasion political debate by urging lawmakers not to burden banks with too many regulations, reports Swiss Info.
The SBA said on Thursday that it supported the introduction of automatic tax data sharing with other countries. However, the lobby group remains firmly against complementary measures to make banks step up efforts to identify untaxed funds that come from abroad.
Parliament yesterday began to debate the automatic exchange of tax information (AIE) bill. This proposes sharing bank data with foreign clients’ home countries to determine if taxes have been paid on assets parked in Switzerland. If passed, the system will come into effect at the start of 2018.
But Switzerland is unlikely to share such information with all countries. In June, the government said it wanted banks to step up internal due diligence on clients from countries that will not have AIE agreements with Switzerland.
The government hopes that these measures, completed at the banks’ own expense, will prevent tax evasion assets from slipping through the net and making it into Switzerland. This proposal has already been twice rejected – in 2013 and 2014.
Politicians face off
At the SBA’s annual Bankers Day presentation in Zurich on Thursday, Chairman Patrick Odier said the lobby group remains “firmly opposed” to introducing enhanced due diligence measures along with AIE.
“As we have said repeatedly, this measure does not correspond with any international standard and would not be understood by other countries or clients,” Odier said.
The parliamentary debate, which kicked off on Wednesday and is expected to last several months, was immediately split down party political lines. The conservative right Swiss People’s Party lined up against AIE and the so-called extra “Swiss Finish” regulations that banks in other countries would not have to bear.
The leftwing Social Democrats hailed the proposed measures as an “historic day” towards reviving the international reputation of the Swiss financial centre. Switzerland has endured years of mounting global criticism for attracting tax evaders, forcing the alpine state to dismantle its once-famed banking secrecy defences.
“Disastrous consequences”
The SBA also urged the government to mend its fences with the European Union to ensure that Swiss banks are not frozen out of the EU market. Switzerland is currently reviewing a raft of financial consumer protection regulations to keep up with recent changes to EU laws.
Odier fears disastrous consequences for the Swiss financial sector if the Swiss adaptations do not fit the bill with the EU. In this case, Swiss banks would no longer be able to serve EU clients from Switzerland.
“A substantial part of the banks’ substance could leave Switzerland if the issue is not resolved,” Odier said.
