Sunday, April 3, 2016

Another Article on the Erosion of Swiss Secrecy (4/3/16)

Gideon Rachman, The gnomes of Zurich are silent no longer (FT 3/28/16), here.  The article starts:
What is the link between the following political scandals? The Petrobras case in Brazil, the 1MDB affair in Malaysia, the unravelling of Fifa, the prosecution of a French minister and a party funding row in Spain. The answer is Swiss bank accounts. 
Customers used to be able to rely on the legendary discretion of the “gnomes of Zurich” but Swiss bank accounts are no longer as secret as many clients once assumed. These days, if a prosecutor in another country asks the Swiss for co-operation in a corruption probe, they will get it. As a result, powerful people who might have hidden money in Switzerland are increasingly vulnerable to investigation. 
The biggest changes in Switzerland’s banking culture followed the huge fines that the US levied on UBS, a Swiss bank, in 2009, for enabling Americans to evade tax. Further US prosecutions of Swiss banks followed, as well as a tightening of American tax law. The EU also began to increase pressure on the Swiss. 
Partly as a result, Switzerland has made decisive moves away from its traditional culture of bank secrecy. The consequences are playing out worldwide.
The article then goes through examples for the countries mentioned in the opening paragraph and then concludes:
The Lagarde list [delived to Greece by Christine Lagard, France's finance minister] had been stolen by a disgruntled employee. The more recent revelations to come out of Switzerland have emerged through official channels. In 2018, Switzerland will move to automatic exchange of information with other global tax authorities. There may well be further scandals to come.

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