Home > Government and Politics > Finance Minister Offers Swiss Banks Tax Evasion Deal

Finance Minister Offers Swiss Banks Tax Evasion Deal

Switzerland’s Finance Minister Eveline Widmer-Schlumpf
– Photo Courtesy of http://www.guardian.co.uk
 

Swiss banks for years have avoided U.S. regulators in regards to helping wealthy Americans commit tax evasion.  But in a world where  banks are under major global  scrutiny and investigation  because of the  Libor manipulation scandal, massive derivative trading losses, money laundering allegations and admissions, and banks participation in the crash of the credit and mortgage markets; U.S. regulators are taking action and banks are now having to answer for their violations.

Swiss banks are sacrificing their employees past and present by giving names to the U.S. authorities in connection alleged employee’s connection with setting up American accounts for tax evasion. Thousands of names are being given to federal regulators according to Douglas Hornung, a Geneva- based lawyer representing 40 current and former employees of HSBC Holdings Plc (HSBA)’s Swiss unit.

“The Federal Council had no right to grant permission for banks to send any information to a foreign authority,” said Marcel Niggli, a professor of law at the University of Fribourg.

“The companies know the risk of penalties in Switzerland is insignificant compared with the business risk in the U.S. It’s a cold-blooded action by the banks.”

The legality of this action is questionable and would violate rules of privacy although the risk of privacy violation consequences  may worth the risk as compared loss of U.S. business for some banks.

“The tax dispute with the U.S. can only be settled without further escalation if the bank cooperates with the U.S. authorities,” said Igor Moser, a spokesman for Zuercher Kantonalbank.

“The respect for the rule of law has declined in a way I simply thought unimaginable a few years ago,” Moser said. “The government treats these business interests of the banks as if they were the business interests of Switzerland because the U.S. market is so enormously important.”

Switzerland’s Finance Minister Eveline Widmer-Schlumpf is attempting to make a deal with the U.S. regulators for the Swiss banks but with elections coming up in November  there is  a limited window of time as as Secretary of State Hillary Clinton and  Secretary of  Treasury Timothy Geithner are both leaving their positions.

“We are prepared to sign a settlement with the U.S. for the Swiss banks today. We feel we have made a constructive proposal to the U.S. but it is up to them to accept it or not,” said Widmer-Schlumpf.

References:

Finance.Yahoo.com
Bloomberg.com
Fedortax.com
IRS.Gov 

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