Switzerland appears to succumb to pressure on banking regulations Jun 23rd, 2009 •
Media reports have suggested Switzerland is close to an agreement on double taxation with the U.S. and Germany as pressure has been mounting on the country to relax its banking secrecy laws.
However, Swiss Finance Minister Hans-Rudolf Merz said his government’s support for the agreement will ultimately depend on how the stalemate over Switzerland’s largest bank UBS is resolved.
The U.S. Internal Revenue Service is pursuing a civil lawsuit against UBS seeking access to data on 52,000 wealthy Americans it claims are hiding nearly $15 billion of assets in Swiss bank accounts.
Meanwhile, the Swiss minister and his German counterpart have reportedly agreed on a revision of their double taxation agreement ahead of a summit of Organization for Economic Cooperation and Development finance ministers today.
The developments stem from the consensus reached earlier this year during the the G20 summit in London. Blaming offshore tax havens as contributing to the current financial crisis, the leaders of the world’s most industrialized nations vowed to crack down on tax evasion by introducing cross-border regulation.
The OECD has estimated that $1.7 trillion to $11.5 trillion dollars are being held in tax havens around the world.
An agreement with the U.S. is considered crucial to Switzerland’s removal from the list of tax havens.