Reuters Article on End of Swiss Bank Secrecy and the Common Reporting Standard (10/5/18)

Michael Shields, Era of bank secrecy ends as Swiss start sharing account data (Reuters 10/6/18), here.  Excerpts:

The era of mystery-cloaked numbered Swiss bank accounts has officially come to a close as Switzerland, the world’s biggest center for managing offshore wealth, began automatically sharing client data with tax authorities in dozens of other countries. 

The Federal Tax Administration (FTA) said on Friday it had for the first time exchanged financial account data at the end of September under global standards that aim to crack down on tax cheats. 

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The initial exchange was supposed to be with European Union countries plus nine other jurisdictions: Australia, Canada, Guernsey, Iceland, Isle of Man, Japan, Jersey, Norway and South Korea. 

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About 7,000 banks, trusts, insurers and other financial institutions registered with the FTA collect data on millions of accounts and send them on the Swiss tax agency. The FTA in turn sent information on around two million accounts to partner states. It put no value on the accounts in question. 

The information includes the owner’s name, address, country of residence and tax identification number as well as the reporting institution, account balance and capital income. This lets authorities check whether taxpayers have correctly declared their foreign financial accounts. 

The annual data swap will expand next year to about 80 partner states, provided they meet requirements on confidentiality and data security. The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes reviews states’ implementation of the accord.

JAT Comments:

1.  This appears to be with respect to the Common Reporting Standard.  See OECD page on The Common Reporting Standard, here, which includes:

What is the CRS? 

The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. 

The Standard consists of the following four key parts:  

- A model Competent Authority Agreement (CAA), providing the international legal framework for the automatic exchange of CRS information;
- The Common Reporting Standard;
- The Commentaries on the CAA and the CRS; and
- The CRS XML Schema User Guide

2. The U.S. does not yet participate in the CRS because it developed and is using FATCA.  The CRS was developed by inspiration of FATCA.  See Wikipedia entry on the "Common Reporting Standard," here.