Tuesday

2nd Jun 2020

Switzerland, Austria and Luxembourg relax banking secrecy

Switzerland, Austria and Luxembourg announced a relaxation of their banking secrecy laws on Friday (13 March) following mounting pressures on both sides of the Atlantic to crack down non-cooperating tax zones.

The news comes only one day after Liechtenstein and Andorra made similar declarations, as a number of financial centres around the world attempt to pre-empt any decision coming out of the G20 leaders summit on 2 April.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Friday's announcements signal "the beginning of the end of tax havens," said UK prime minister Gordon Brown (Photo: Wikipedia)

As western governments feel the pinch due to expensive stimulus spending projects coupled with reduced tax receipts, the spotlight has been turned on a handful of geographic locations that profit by harbouring capital owned by companies and wealthy individuals from abroad.

The Swiss government said on Friday that it intends to adopt OECD standards on the sharing of banking information between different countries, citing its desire to avoid being placed on the organization's ‘black list' of tax havens.

"If Switzerland were to wind up on a black list it wouldn't only hurt the banking sector," Finance Minister, Hans-Rudolf Merz, said at a press conference in Bern implying that the economy as a whole would suffer.

In the past, Switzerland has said that signing up to OECD standards would compromise the banking secrecy of its clients.

Switzerland's largest bank, UBS, last month handed over the names of 300 customers to the US government after it produced strong evidence they were avoiding paying tax.

It is estimated that Switzerland holds around $2 trillion worth of capital from abroad reports the BBC.

In a separate announcement on Friday, Luxembourg also said it would cooperate with tax authorities from other countries but will only provide client details once ‘concrete proof' of tax evasion is provided.

For its part, Austria said will renegotiate current agreements on banking secrecy in the fight against tax fraud and evasion its finance minister, Josef Proell, said on Friday.

It too has only agreed to hand over information once supplied with evidence of tax evasion by individuals with accounts in the country.

"There won't be an automatic exchange of information, but we will renegotiate a number of the 80 tax agreements that we have with other countries," Mr Proell said in Vienna.

"We have been fighting tax evasion and fraud in the past, and we will continue to do so," he added.

France, which has lead calls in recent weeks for a comprehensive review of the ‘uncooperative jurisdictions', was initially guarded in its response to the news.

"The devil is in the details," said French Finance Minister, Christine Lagarde, in Paris. "We must go all the way and see if banking secrecy is sufficiently lifted."

UK Prime Minister Gordon Brown said the changes were "the beginning of the end of tax havens." "Tax evasion, which costs the global economy billions of pounds each year, will become more difficult in future."

Vestager hits back at Lufthansa bailout criticism

Commission vice-president in charge of competition Margarethe Vestager argued that companies getting large capital injections from the state during the corona crisis still have to offset their competitive advantage.

German court questions bond-buying and EU legal regime

The German Constitutional court ordered the European Central Bank to explain its 2015 bond-buying scheme that helped eurozone stay afloat - otherwise the German Bundesbank will not be allowed to take part.

No breakthrough at EU budget summit

EU leaders failed to reach agreement on the EU's long-term budget, as richer states and poorer 'cohesion countries' locked horns. The impasse continues over how to fund the Brexit gap.

News in Brief

  1. Trump threatens to use army to crush unrest in US
  2. Trump wants Russia back in G7-type group
  3. Iran: Fears of second wave as corona numbers rise again
  4. WHO: Overuse of antibiotics to strengthen bacterial resistance
  5. Orban calls EU Commission recovery plan 'absurd'
  6. ABBA's Björn new president of authors' rights federation
  7. Malta and Libya to create anti-migrant 'units'
  8. France reopening bars and parks next week

Stakeholders' Highlights

  1. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  2. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  3. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  4. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis
  5. UNESDACircularity works, let’s all give it a chance
  6. Nordic Council of MinistersNordic ministers call for post-corona synergies between economic recovery and green transition

Latest News

  1. Malta fiddles on migrants, as Libya burns
  2. Borrell: EU doesn't need to choose between US and China
  3. Post-Brexit and summer travel talks This WEEK
  4. State-level espionage on EU tagged as 'Very High Threat'
  5. Beethoven vs Virus: How his birthplace Bonn is coping
  6. EU's new migration pact must protect people on the move
  7. Spain takes 'giant step' on guaranteed minimum income
  8. Vestager hits back at Lufthansa bailout criticism

Join EUobserver

Support quality EU news

Join us