Bottom line, Ms. Sheppard notes that the Swiss are up to its old behavioral patterns. What it appears to give under international and, specifically, U.S. pressure, it takes away through the back door. Specifically, the U.S. thought it had negotiated the power to make "behavioral pattern" requests for information from Swiss financial institutions about U.S. depositors. Normally, treaty requests require that the requesting party (the U.S. here) name the individual for whom information is requested, but the nature -- by design -- of the Swiss banking system is that U.S. (and other countries similarly situated) will not know the names of depositors subject to its tax jurisdiction. So the protocol allowing behavioral pattern requests seemed to be quite a break through. So the U.S. could have reasonably thought. But, the Swiss government has its ways. As with religion (and cheating other governments may be a religious imperative for the Swiss), it is all about interpretation.
Ms. Sheppard also discusses issues relating to withholding and the EU savings directive, particularly in response to treaty protocols with Germany and the U.K. The savings directive requires automatic exchanges of information regarding interest payments to accounts of EU residents or impose a withholding tax.
Finally, Ms. Sheppard notes the Swiss claim of promoting only "white money." She says:
Switzerland is now telling the world that it is trying to get right as a financial center, while hanging onto its basic business of helping the world's rich hide their assets. The Swiss government plans to require bankers to apply due diligence to prevent untaxed funds from being banked there. This is called the "white money" strategy, in contrast to the "black money" that made the country rich.Ms. Sheppard then goes on to discuss legislative proposals to put more teeth in compliance with respect to foreign accounts.
It seems to me that Switzerland has little competitive advantage as a financial center except in the world of secret money -- hidden by potentates from their subjects, hidden by tax evaders from their governments, and hidden by others from persons at least some of whom have a potential legitimate interest in knowing about the funds (e.g., spouses in divorce proceedings, partners who have seen money disappear in the Swiss banking system, etc.).
David Jolly, Germans and Swiss Reach Stricter Deal on Tax Cheats (NYT 4/5/12), here.
Discusses the German approach to the Swiss banks to pay 21 to 41% of the amount in the secret accounts, future withholding and tax on inheritance. "Crucially, from the point of view of maintaining Swiss banking secrecy, account holders’ names will not be revealed to Berlin, and the Swiss authorities will be responsible for ensuring that taxes are paid on behalf of the account holder, who can remain anonymous if desired." The estimate is a one-time payment of $10-15 billion and annual withholding of $750 million.