Swiss Banks Agree to end Secrecy

Swiss Banks Agree to end Secrecy

http://timesofindia.indiatimes.com/articleshow/4266161.cms
15 Mar 2009, 0520 hrs IST, AGENCIES

GENEVA: Wealthy individuals and companies will no longer be able to hide their riches in Zurich's bank accounts now that Switzerland has bowed to international pressure to end the era of no-questions-asked banking.

Under pressure from the US and other troubled economies, the Swiss government announced on Friday that it would cooperate in international tax investigations, breaking with its long-standing tradition of protecting wealthy foreigners accused of hiding billions of dollars. Austria and Luxembourg also said they would help.

Against the background of the financial crisis, international cooperation has grown stronger, especially against tax crimes, Swiss president Hans-Rudolf Merz said.

The decision was a hard one for the Swiss, whose renowned discretion has long attracted the wealth of famous foreigners as well as refugees fleeing political or religious persecution.

Swiss banks hold an estimated $2 trillion of foreign money, and financial services account for about 12% of the country's GDP. According to the Boston Consulting Group, those holdings amount to one-fourth of the world's foreign-owned assets.

The famed numbered accounts that do not bear the owner's name will still be available for clients willing to pay for added anonymity. But the government will now be able to demand account holders' identities in cases of suspected wrongdoing, and to share that information with foreign authorities.

Switzerland's move comes ahead of a meeting next month in which world powers will discuss stepping up their fight against tax cheats. The greatest pressure has been on Switzerland, which has been embroiled in a dispute with the US over wealthy Americans who have stashed their money in its biggest bank, UBS AG.

Seeking to avoid being blacklisted as uncooperative tax havens, other countries have also announced plans to open their books to foreign tax inspectors. Austria and Luxembourg said on Friday that they would offer more help on tax investigations. Over the past month, leaders have made similar promises in Singapore,

Liechtenstein, Bermuda, the British islands of Jersey and Guernsey, and tiny Andorra on the border between France and Spain.

The move comes as a fillip to British Prime Minister Gordon Brown's attempts to clamp down on tax havens at the G20 meeting.