Sunday

24th Mar 2019

France threatens Switzerland on tax evasion

  • Sarkozy in Cannes. Liechtenstein and Switzerland are the only countries on the OECD list which play a significant role in tax scams (Photo: diplomatie.gouv.fr)

French leader Nicolas Sarkozy has promised to make Switzerland into an international pariah unless it stops helping EU tax payers hide money. But EU countries have a poor track record of cracking down on high-level cheats.

The president told press after a G20 summit in Cannes on Friday (4 November): "We do not want any more tax havens. The message is very clear, countries which persist in being tax havens will be ostracized by the international community."

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

He named and shamed Liechtenstein and Switzerland as being on an OECD list of 11 countries which do the least on tax co-operation.

The OECD, a Paris-based club of wealthy nations, earlier on Wednesday gave the full roll-call. The other nine are: Antigua and Barbuda, Barbados, Brunei, Botswana, Panama, Seychelles, Trinidad and Tobago, Uruguay and Vanuatu.

The Cannes summit saw G20 countries which had not already done so sign up to an OECD convention on cleaning up the sector. Its joint communique also threatened "countermeasures" against the 11 if they do not mend their ways.

OECD official Jeffrey Owens told EUobserver the G20 is making "significant progress." He said its initiatives have in recent years led to recovery of €14 billion in extra tax revenue.

One anti-tax-evasion NGO hailed Sarkozy's tough rhetoric.

"It may be a welcome step for the EU if France is prepared to use its political muscle against Switzerland," Markus Meinzer, from the Berlin office of the Tax Justice Network said.

He explained that EU finance ministers are currently negotiating a robust new law on tax evasion, the so-called revised Savings Taxation Directive. But Austria, Luxembourg and Italy are threatening to block the bill unless it covers Switzerland and UK overseas territories like the British Virgin Islands (BVI).

For his part, Nick Shaxson, the author of Treasure Islands, a book on how tax havens precipitated the financial crisis, said OECD-type lists do more harm than good.

"It's always been a mystery why some jurisdictions make the lists and others don't. In some ways, they are worse than useless because countries can point to them and say: 'Look at us. We're clean. We're not on the list," he told this website.

Shaxson noted the BVI is not on the list even though "vast numbers of corrupt, sleazy structures are run through the BVI."

G20 member the UK is also not included despite being one of the last countries in the world to tolerate "bearer shares" - a legal trick to hide the real owner of a company by saying that whoever holds the physical share documents in his hands at any given time is responsible.

Shaxson added that Greece is currently in talks with Switzerland on a tax repatriation deal on the model of a UK-Swiss deal signed this year.

Rich Greeks have reportedly stashed €200 billion in Switzerland. But Shaxson said that if the Greek deal contains the same loopholes as the British one, "the Greeks will be lucky if they get any more than €300 million out of it" in unpaid tax.

EU tax-scam body stuffed with tax avoidance experts

The European Commission has stuffed an advisory group on 'transfer pricing' - one of the biggest tax scandals of recent years, robbing countries of billions of euros a year in lost revenues - with multinationals that engage in the practice and the four biggest accounting firms in the world, who advise these firms on how best to do so.

EU commission to target growth with new laws in 2012

The European Commission's to-do list for 2012 is dominated by measures to restore economic growth. But the current dispute over a proposed financial transaction tax shows that EU countries might not play ball.

News in Brief

  1. EU leaders at summit demand more effort on disinformation
  2. Report: Corbyn to meet May on Monday for Brexit talks
  3. Petition against Brexit attracts 2.4m signatures
  4. Study: Brexit to cost EU citizens up to €40bn annually
  5. NGOs demand France halt Saudi arm sales
  6. Report: Germany against EU net-zero emissions target
  7. Former top EU official takes job at law firm
  8. Draft text of EU summit has Brexit extension until 22 May

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Latest News

  1. Italy takes China's new Silk Road to the heart of Europe
  2. What EU leaders agreed on climate - and what they mean
  3. Copyright and (another) new Brexit vote This WEEK
  4. EU avoids Brexit crash, sets new date for 12 April
  5. Campaigning commissioners blur the lines
  6. Slovakia puts squeeze on free press ahead of election
  7. EPP suspends Orban's Fidesz party
  8. Macron is confusing rigidity with strength

Join EUobserver

Support quality EU news

Join us