Some things we like here at CSR21:
- so imagine our distress to learn that the two are at loggerheads. While we’re sensitive sorts who generally visit Switzerland to eat chocolate or sit down and weep by the waters of Lake Leman, it transpires that others use the country to store wealth. And some of those others, a tiny minority no doubt, may do so with a long term view of avoiding tax.
Another thing of which this particular correspondent is personally in favour is a contract between the individual and the state based on taxes, public services and the like (NB this view is not necessarily shared by all of us, as we attempt to cover all intellectual and moral viewpoints). So, in the awful daring of a moment's surrender, we go on record to say we see this as a pity.
That said, our job’s to bring you information.
From the Tax Justice Network (TJN), then, this cold blast at our backs. Admittedly not a neutral source, not by a long shot, the Network blog brings us the news that the Swiss Federal Council on Wednesday issued a statement “making it all too clear what it thinks ‘the new global standard for the automatic exchange of information in tax matters’ should look like... The Swiss position is a direct threat to global moves on transparency. A private tax adviser tells TJN: ‘My view is that they are trying to wriggle out of it.’”
This concerns the OECD project to build a new framework for international financial transparency - touched on here in February.
Here’s the TJN take on the situation:
The Swiss statement is yet more evidence of what has been called a “circle the wagons” strategy: when under pressure from a world that’s moving forward, give ground only inch by inch, if at all; hold on to secrecy where possible – and particularly exploit the weaknesses of weaker and more vulnerable countries.
Meanwhile, trumpet to domestic and international media and anyone who will believe them how, ahem, clean, well-regulated and transparent the historic haven for thieves and abusers has suddenly become!
Negotiations on the automatic exchange of information with other selected countries are to be examined. In an initial phase, priority would be given to the introduction of the automatic exchange of information with countries with which there are close economic and political ties and which, if appropriate, provide their taxpayers with sufficient scope for regularisation and which are considered to be important and promising in terms of their market potential for Switzerland’s finance industry.
The introduction of the automatic exchange of information with foreign countries would be conducted by means of separate bilateral agreements with the partner countries. Moreover, implementing legislation would be required in national law. Existing legislation excludes the automatic exchange of information.
TJN quote the take of an unnamed private tax adviser on this:
“They are trying to choose who to exchange with, and under what conditions. The OECD system was not set up so that countries can add whatever riders they like onto it. They [the Swiss] want to turn this to their advantage, maybe to even move backwards from where they are now.”
- and the blog also provides a take from Mark Herkenrath of Alliance Sud, the Swiss Alliance of Development Organisations (Alliance Sud is common platform for development policy of the six leading Swiss development organisations: Swissaid, Catholic Lenten Fund, Bread for all, Helvetas, Caritas and Interchurch Aid). Herkenrath says:
“The Swiss government will stick to a bilateral approach to AIE and engage in “cherry picking”. That is, it will try to exclude developing countries from AIE for as long as possible – despite opposition by various NGOs and Left-wing members of parliament and a lively debate within the federal administration (I do not think the Swiss development agency SDC is in favor of excluding developing countries from AIE).
The problem is that the Swiss government is not expecting any external resistance to this strategy of cherry picking. Neither the OECD nor the G20 have made a clear statement in favor of a multilateral approach to AIE. Nor have they asked for the inclusion of developing countries in such a multilateral approach. Nor have LIC/LDC governments made it clear that they wish to be included.”
There’s more on the blog post, of course, which from our point of view in this unreal city, under the brown fog of an summer summer afternoon, we think’s well worth a read. The impassioned ones are always more fun. It includes:
- Analysis of the danger that countries with close economic and political cooperating to the exclusion of the world’s less fortunate populations
- The spin that’s enabled Switzerland and Singapore to emit a rosy fragrance in matters related thus far
- The position of the Swiss Federal government.
Go see it. Turn, look a moment in the glass, and ask yourself if any of this applies to you. Have fun, have a good weekend.
IMAGE: R. B. Kitaj, If Not, Not. 1975 - 1976, oil and black chalk on canvas. Scottish National Gallery of Modern Art