Our correspondent Andreas Frank reports;
The same day, the OECD published its “Standard for Automatic Exchange of Financial Account Information”, which allows for the exchange of tax information upon request, joining all major countries worldwide in addressing tax evasion, the Swiss Bankers Association (SBA) criticized the framework as very complex and too costly.
Reacting to this latest move by the OECD, which is mandated with setting global standards for framing policy to address tax evasion and related issues, SBA said in statement issued from Basel that it has been in favour of a global standard for automatic exchange of information for over a year and has also contributed constructively to the drafting process. Terming the OECD recommendations a “general a step in the right direction”, SBA however said that an important positive point was confidentiality of the exchanged data, that is, adherence to strict data protection rules by the responsible authorities abroad.
The grouping of Swiss banks said that “what has still not been satisfactorily addressed is the question of a level playing field. The basis to be used for client identification is domestic money laundering regulations. There are still different standards in this area. As a result thereof, countries with less strict regulations will be able to exchange less information than countries such as Switzerland.
Hitting out at the US, it further said that “it is becoming apparent that the US will not be prepared to offer full reciprocity” and said that there were chances that some provisions introduced in the US could be misused as a loophole for clients of US banks.
The SBA further said that the implementation of the new OECD standard is highly complex and will result in significant costs. The SBA said: “Because it is a multilateral set of rules, the costs are estimated to reach between Swiss franc 500-800 million (Rs 3,500-6,000 crore), and therefore will be clearly higher than the costs of implementing FATCA (the US law for addressing offshore tax evasion).
“… Due to the complexity, the SBA estimates that a proper implementation will require at least two years from the date that the standard comes into effect,” it added.
The association continues to expect that all concerned issues are addressed before an automatic exchange of information comes into effect.
On October 2013, Switzerland signed the OECD convention, which allows for the exchange of tax information upon request, joining all major countries worldwide in addressing tax evasion.
In Switzerland, the convention will still have to be submitted for consultation before heading for ratification by parliament. It could also potentially go to a nationwide vote before being implemented. Swiss Bankers Association Statement
