16 October 2013
Salman Shaheen - ITR
Switzerland has joined the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters. However Rudolf Elmer, the Swiss whistleblower, doubts it will significantly increase the tax haven’s transparency.
Yesterday, Switzerland became the 58th country to sign up to the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
“[It] sends a clear and strong signal that Switzerland is part of the community of states which consider international tax cooperation as a necessity,” said Angel Gurria, OECD Secretary-General.
Stefan Flückiger, Swiss ambassador to the OECD, argued that Switzerland has been committed to complying with international standards in tax matters since March 2009.
“The signing of the Convention confirms Switzerland's commitment to the global fight against tax fraud and tax evasion with a view to safeguarding the integrity and reputation of the country's financial centre,” Flückiger said.
Critics of Switzerland’s role as one of the world’s most notorious tax havens are unimpressed by the measure, however.
The Multilateral Convention provides the option to undertake automatic exchange, which is a step towards making this the new global standard, however it requires agreements between the interested parties. As yet, Switzerland has not signed any of these agreements and it is unclear whether automatic information exchange will result in practice.
Rudolf Elmer, who was arrested for allegedly breaching Swiss banking secrecy laws when he gave WikiLeaks the names of 2,000 tax evading clients of his former employer Julius Bär, is particularly sceptical of Switzerland’s latest move.
“It is a first step but I have to say that, as a Swiss person, I do not trust the Swiss government because my case definitely shows that Switzerland still will prosecute anyone who fights against tax evasion within Switzerland,” Elmer said. “Not only me, but also my wife is still an enemy of the state. We both are now investigated having violated Swiss bank secrecy by making public Cayman data.”
Elmer is also not convinced the OECD will follow through and believes the Convention is mostly just talk. He points out that there are still too many tax havens in the OECD such as Luxembourg, Liechtenstein, the US with Delaware, and the UK with Jersey and the City of London.
“As of today there is only one serious action I am convinced about it and that is FATCA in respect of Switzerland,” said Elmer. “If Switzerland has made this move to be part of the mutual administrative assistance it was forced to do so because there are already at least 50 countries part of it. Switzerland is the world champion in delaying matters and that is simply another striking example.”