$2.1 Trillion Still Stashed in Switzerland
Despite the serious breaches on banking secrecy opened in 2009, Switzerland remains the world leader in the management of foreign wealth. Foreign assets represent about US$2.1 trillion, equivalent to 27% of the world market. Anne Cheyvialle reports for Le Figaro.
Any discussion of bank secrecy, conducted at the European or international level, one way or another always reverts back to Switzerland. Enshrined in the Constitution, it is part of the Helvetian genes and has enabled Swiss banks to thrive for decades.
Figures confirm this trend: despite serious breaches opened in 2009 on banking secrecy, Switzerland remains the world leader in the management of foreign wealth. The volume of assets represented US$2.1 trillion by 2011, according to estimates by Boston Consulting Group, equivalent to 27% of the world market. Switzerland is well ahead of the Channel Islands, the Caribbean tax havens, as well as Hong Kong and Singapore – with each zone representing US$1 trillion (13% of total), while the United Kingdom and Luxembourg stood at US$900 billion and US$500 billion respectively.
But Bern has made progress towards greater transparency, yielding to international pressure, the crusade launched by Paris, Berlin and especially Washington. To escape a gray list of tax havens of the OECD, the International Organization which is leading this fight, Switzerland has abolished the distinction between fraud and tax evasion for foreign holdings.
In the wake, Bern adopted the principle of information exchange upon request (set by the OECD) and signed several tax treaties of reciprocal administrative assistance, including with France. These treaties have taken effect since January 1, 2011. The Confederation also endorsed the decision in July 2012 by the OECD, to conduct grouped requests that no longer require more explicit identification of the customer and the bank to secure strategic information on certain accounts.
Except that these good intentions do not yet yield the desired result. To the chagrin of Bercy, requests for administrative assistance too often face resistance from Swiss tax authorities, who invoke local law, which requires the notification of a person in case of a tax audit.
Today, while the fight against tax evasion is gaining steam – driven by the United States and the European Union – Switzerland seeks to play good student. As special guest to the G20, the country was prepared to accept the automatic exchange of information, which would seal the death warrant of banking secrecy for accounts of foreign residents located in Switzerland.
A Global Standard
The game is complicated for Swiss authorities: how to deny Europeans what it has been granting Americans? Bern has signed an agreement in February with the Americans. This agreement should take effect in 2014. The Helvetian authorities say they are ready to negotiate the application of the Savings Directive with the EU.
But not at any price. Bern wants to impose conditions to its surrender. Switzerland is ready to move forward if there is a global standard, under the auspices of the OECD, and if this standard is applied by all countries, especially by the major international financial centers such as London, New York, Dubai, Singapore and offshore Anglo-Saxon centers. In exchange, the financial sector also demands greater access to the European market.