Bankers Association warns EU over banking secrecy

SBA president Georg Krayer (left) and CEO Urs Roth had tough words for the EU Keystone

The Swiss Bankers Association has issued a strong warning to the European Union against using the OECD - which targets tax evasion - as a platform to try to erode Swiss banking secrecy.

This content was published on February 5, 2003 - 10:59

At a news conference in Zurich, the Association said such a move would be "unacceptable".

The warning comes two weeks after EU finance ministers meeting in Brussels hammered out an agreement among themselves on the taxation of savings income.

As a non-EU member, Switzerland had been asked to agree to an exchange of information about EU citizens' accounts to combat tax evasion.

The Swiss refused point blank - saying that exchanging information would break its bank-client confidentiality rules. Instead Bern offered to introduce a withholding tax of up to 35 per cent as a so-called "equivalent measure".

EU finance ministers came around to the Swiss proposal two weeks ago, after failing to persuade three of their own members - Belgium, Luxembourg and Austria - to scrap banking secrecy.

The Bankers Association's warning echoes comments from the Swiss finance minister, Kaspar Villiger, who said after the EU deal that Brussels had to recognise that Switzerland was not a "tax haven".

Villiger said Bern should not therefore be subject to censure by the Organisation for Economic Cooperation and Development, which is cracking down on tax havens.

Unresolved issues

Association chief executive officer Urs Roth said on Wednesday that the EU had finally "regained its sense of political reality" by recognising that the coexistence of a withholding tax and the exchange of information was the only consensual solution to the issue.

Before an agreement on savings taxation could be reached, though, he said there were still a number of unresolved issues which required the Association's full attention.

"We may have won a mini-victory, but there is still a long way to go," he argued.

In particular, Roth said that Switzerland would not accept any discriminatory treatment compared with EU member states with regard to its status as a third country.

"As far as tax rates are concerned, we are not prepared to make our clients worse off than they would be in an EU country," he said.

Describing the Swiss offer of a withholding tax as "generous", Roth argued that Switzerland must not "pay" twice over.

"Unacceptable" pressure

"It would be unacceptable for the EU to misuse the OECD to exert leverage on Switzerland to give up bank-client confidentiality," he said.

"The EU finance ministers' request for the European Commission to maintain pressure on Switzerland and work towards an automatic exchange of information is dishonest and wholly unacceptable," he added.

"If the pressure is now to be shifted to the OECD, there can be no agreement on the taxation of interest income."

Roth said that the Association had no precise information from other third countries on the issue.

"We do know, however, that the United States has no intention of entering into negotiations with the EU on this issue: it is clearly opposed both to a withholding tax and to the automatic exchange of information," he commented.

Bitter wrangling

Roth said that the tough bilateral negotiations and the "bitter wrangling" within the EU had made it clear that the international financial centres were engaged in a "no-holds-barred" struggle for the most favourable conditions.

And he warned that although an agreement between Switzerland and the EU had moved a step closer, the conclusion of an international treaty still depended on outstanding measures being resolved in a satisfactory way.

The Association, he said, was reserving its judgement. "We will not make any definitive statements until we have examined in detail the content of any potential agreement between Switzerland and the EU," Roth stressed.

swissinfo, Robert Brookes

bankers brief

Switzerland has made clear it is willing to sign up to the EU's savings tax directive provided certain conditions are met.

One is that the EU does not try to put pressure on Swiss banking secrecy through the OECD.

Bern says a deal must also be conditional on bringing a speedy conclusion to bilateral negotiations on issues such as migration and asylum.

A deal would likely see Switzerland levy a withholding tax on EU citizens' savings income, but without any exchange of information about account holders.

End of insertion

This article was automatically imported from our old content management system. If you see any display errors, please let us know:

In compliance with the JTI standards

In compliance with the JTI standards

More: SWI certified by the Journalism Trust Initiative

Contributions under this article have been turned off. You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at

Share this story

Change your password

Do you really want to delete your profile?