Financial Transparency Coalition

From Argentina’s La Nacion newspaper:

“Switzerland has denied the Argentine judicial authorities information about 4,000 or so Argentine-owned bank accounts in Switzerland, saying that Argentina’s request had no solid foundation.”

This concerns data revealed by an HSBC whistleblower, Hervé Falciani, which has caused a political storm in many countries and forced Falciani to go into hiding. 

For each of the 4040 accounts in question, the report continues, Argentina failed to demonstrate for each one of the people involved:

“the (illegal) actions each account holder is accused of; the time and place that each action took place; the modus operandi; the link between any illegal act to the Swiss accounts; or the illegal origin of the money or the transactions.”

Never mind that these were not random names, but Argentinian taxpayers who had accounts at HSBC and hadn’t declared them.

Switzerland remained top of our last Financial Secrecy Index, despite some improvement, prompting some accusations from Switzerland that we were guilty of “Swiss-bashing” (or “Schweiz-bashing.”) Swiss banking circles are very keen to portray a picture of a banking sector that has cleaned up. It’s a picture that has been quite widely accepted in the Swiss media. Things are certainly better than they were in an recent appalling past — but the ongoing existence of Swiss banking secrecy alone ought to be enough to demonstrate the existence of a severe problem. this latest rejection only underscores that Switzerland still has a very long way to go.

Those keen to portray Switzerland as having cleaned up may want to ponder a couple of other issues.

The world is moving into an era of improved cross-border transparency, notably via the OECD’s Common Reporting Standard, but Switzerland is one of those tax havens that wants to cherry-pick who it opens up to: basically it will exchange (some) information with countries with power that could threaten it (basically, the United States and European countries) but it wants vulnerable developing countries to remain as wide open as possible to the tender mercies of Swiss banking. Take this recent official communique, for example:

Q: With which countries will Switzerland enter into a bilateral agreement on the automatic exchange of information?

A: The primary focus is on the EU and its member states, as well as the United States. Negotiations on the automatic exchange of information with other selected countries are to be examined. In an initial phase, consideration would be given to countries with which there are close economic and political ties and which provide their taxpayers with sufficient scope for regularisation and which are considered to be important and promising in terms of their market potential for Switzerland’s financial industry.

(See more here.) In other words, we’ll exchange with your country if you give your élites an amnesty for crimes committed via Swiss banking. (Of course offering an amnesty is tantamount to saying that the activities being involved was illegal: or why would one feel the need to offer it?) And, this suggests, we’ll open up on secrecy if you open up for our bankers in other areas. (More on that in a subsequent blog: we predict this is going to become all the rage.)

This clearly goes against the new spirit of automatic information exchange — which is about enhancing transparency, and not about giving more business to the Swiss financial centre.

Switzerland has a long, long history of giving ground on its secrecy industry only when forced to, and only conceding the ground inch by inch.

We’ve on several occasions documented Swiss efforts to sabotage Europe’s former flagship transparency mechanism, the European Savings Tax Directive, notably through trying to play divide and rule via the corrupt bilateral “Rubik” agreements (and our savage forensic critique of those deals turned out to be pretty much exactly right).   We’ve demonstrated how Switzerland has used the promise of limited information exchange as a crowbar to force all sorts of unwarranted concessions out of developing countries in other areas: see the case of Zambia, for example). It continues to reject any information exchange based on whistleblower information.

So, yes, Switzerland continues to be a large, obstructive tax haven.