Saturday

21st Apr 2018

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."

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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. Audit office: Brexit 'divorce' bill could be billions higher
  2. MEPs urge better protection for journalists
  3. Dieselgate: MEPs back greater role for EU in car approvals
  4. European parliament adopts new organic farming rules
  5. EU granted protection to half million people in 2017
  6. Report: Facebook to carve 1.5bn users out of EU privacy law
  7. Greek court ruling permits migrants to travel to mainland
  8. Commonwealth summit hopes for trade boost after Brexit

Stakeholders' Highlights

  1. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  2. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  3. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  4. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  5. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  6. UNICEFCalls for the Protection of Children in the Gaza Strip
  7. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  8. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  9. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  10. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  11. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  12. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia

Latest News

  1. ECJ ruling set to end 10-year 'mouth tobacco' lobbying saga
  2. Whistleblowers, Syria and digital revolution This WEEK
  3. MEP friendship groups offer 'backdoor' for pariah regimes
  4. Macron and Merkel pledge euro reform
  5. Obscurity surrounds EU military fund's expert groups
  6. New EU party finance rules short circuit accountability
  7. Draghi to stay in secretive 'lobby' group
  8. Bulgaria offers lesson in tackling radical-right populists