GENEVA – Attempts by Germany and France to punish Switzerland for failing to cooperate in tax investigations stemmed from their jealousy of the Alpine nation’s financial industry, the president of the Swiss Bankers Association said Friday.
Pierre Mirabaud said Switzerland had become an easy target for other countries seeking to divert attention from their own tax loopholes and overly complicated tax systems.
“As a world leader in private banking, (Switzerland) triggers jealousies,” he told reporters in Geneva.
“In these difficult economic times it serves as a handy lightning conductor on which financially challenged states can discharge their frustrations and divert the attention of their citizens away from shortcomings in their own complicated and inefficient tax systems,” he said.
Switzerland agreed earlier this month to adopt international rules on tax cooperation in a bid to avoid being blacklisted at next week’s G-20 meeting.
Mirabaud said Germany and France were behind the move to blacklist Switzerland.
The two countries and Britain have led the charge to impose economic sanctions against uncooperative tax havens when the Group of 20 leading economic powers meet in London on April 2.
U.S. President Barack Obama has also backed moves to crack down on tax havens around the world that are estimated to cost the United States $100 billion in lost tax revenue each year.
The United States has singled out Switzerland’s largest bank, UBS AG, in a legal assault to crack Swiss banking secrecy’s protection of alleged U.S. tax evaders.
Mirabaud said he hoped attacks against Swiss banks would cease now that Switzerland has agreed to comply with tax information exchange rules drawn up in 2000 by the 30-nation Organization for Economic Cooperation and Development.
“The Swiss Bankers Association now expects an end to all improper criticism of Switzerland and its legal system, and also an end to the various threats to put Switzerland on a so-called ‘black list.”‘
The creation — at the request of Germany and France — of an informal OECD list of uncooperative tax havens provoked anger in Switzerland, which said it was not consulted despite being a member of the Paris-based group.
“The way Switzerland has been treated by the OECD recently has been quite disgraceful. The secret drafting of a blacklist behind a member’s back is unacceptable and, in my view, seriously damages the OECD’s credibility.”
A spokesman for the OECD declined to comment.
Asked whether Switzerland’s banking industry would suffer a significant loss of customers if banking secrecy for foreigners is compromised, Mirabaud said he was not worried.
“I don’t see any reason why we should have a major outflow of money from Switzerland,” he said.
Swiss banks hold an estimated $2 trillion of foreign money, and financial services add about 12 percent of GDP to the national economy. According to the Boston Consulting Group, those holdings amount to one-fourth of the world’s foreign-owned assets.
Mirabaud said Switzerland’s decision to open up to foreign tax evasion probes was understandable given the pressure it was under by other countries.
“We are in an economic war,” he said.
Other countries now have to show that they too would work toward a level playing field on tax matters instead of exploiting Switzerland’s weak position on the international stage, Mirabaud said.
“I believe there are more tax evaders with accounts in Florida and Delaware than in Switzerland,” he said, referring to the two U.S. states that have become a magnet for foreign capital thanks to their flexible incorporation laws and minimal reporting requirements.