Switzerland pledges to lessen bank secrecy

Switzerland, Luxembourg and Austria said they would relax their bank secrecy laws amid growing international pressure to stamp out tax havens, prompting tiny Monaco to say it would follow suit.


Their announcements followed similar moves Thursday by Belgium, Liechtenstein and Andorra — the latter two on an OECD list of uncooperative tax havens — and came ahead of a Group of 20 meeting on Saturday where the issue is a hot topic.

Radical action sought

International pressure to clamp down on tax havens has been growing as the global financial crisis bites ever deeper, sparking calls for radical action to curb abuses blamed for the debacle, among them tax evasion.

The Swiss government said Friday it would accept standards laid down by the Organisation for Economic Cooperation and Development (OECD) to allow the exchange of information with other countries.

This, however, would be done “case by case” and on the basis of “concrete and justified” requests, it said in a statement, joining the other two countries in stating firm limits to the steps it will take.

Clients still protected

Switzerland was “maintaining banking secrecy and resolutely refused all automatic transmission of information,” the government said.

“The private sphere of clients is still protected from unjustified watching from abroad,” it said, but added: “Banking secrecy does not protect tax crimes.”

British Prime Minister Gordon Brown hailed Switzerland\’s decision as “the beginning of the end of tax havens.” It was “a very real step on the road towards the exchange of tax information between all countries,” he said.

Luxembourg, Austria to act against fraud suspects

Luxembourg also said it would relax its strict banking secrecy laws and cooperate with foreign tax authorities in cases where fraud was suspected.

“Luxembourg is in favour of exchanging information on demand but only in precise cases and with clear proof” of suspicion of fraud, Treasury and Budget Minister Luc Frieden said.

Luxembourg would “align with OECD standards” but “banking secrecy is not incompatible with OECD rules,” he said. “Luxembourg would therefore maintain its banking secrecy as an instrument for protecting private life.”

Austria insisted Friday that it would lift bank secrecy but only where there was “justified suspicion” of wrongdoing.

“Austria will agree to supply information if the suspicions are justified and can be backed up,” said Finance Minister Josef Proell.

But “we will not change our legislation and there is no question of direct or systematic access (to) bank accounts,” he added.

Austrian finance ministry spokesman Harald Waiglein told AFP that all countries had to change — including the United States and Britain.

Monaco to follow

Later on Friday, the tiny principality of Monaco announced that it would follow the other countries\’ lead.

“After the announcement this Friday of the significant evolution concerning the European Union member countries and third countries with bilateral conventions, Monaco is ready to cooperate in the fight against tax fraud in line with international standards,” a government statement said.

Monaco will not lag in the “general movement towards transparency,” it said, without spelling out what measures it planned to take.

In the Channel Island of Jersey, protestors on Friday demonstrated outside international banks, accusing them of contributing to the world financial crisis through opaque banking practices.

‘Sanctions mechanism’ sought

France and Germany have been leading the charge to clamp down on tax havens, calling for an international “sanctions mechanism,” with the issue high on the agenda for Saturday\’s meeting of G20 finance ministers in Horsham, England.

A full G20 summit follows on April 2, with European governments largely pressing for tighter regulation to prevent a recurrence of a global financial crisis which has drawn comparisons with the 1930s Great Depression.