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Business

Mini summit meets to defend banking secrecy

Latest update : 2009-03-08

Luxembourg, represented by its Treasury Minister Luc Frieden (photo), hosts a summit with Austria and Switzerland on Sunday to decide how best to defend banking secrecy against critics of tax havens as a G20 summit on the subject approaches.

AFP - Switzerland, Luxembourg and Austria meet Sunday to prepare their defence against a growing international onslaught on tax havens.
  
Luxembourg Treasury Minister Luc Frieden was to host Swiss Finance Minister Hans-Rudolf Merz and Austrian Finance Minister Josef Proell for talks on how to defend banking secrecy.
  
Switzerland has been the driving force behind the meeting, eager to avoid being put on an international blacklist of tax havens due to be revealed at a summit of the Group of 20 industrialised and developing powers in London on April 2.
  
Switzerland has come under pressure from the United States and big European countries to yield on banking secrecy, which has made the Alpine country an international financial centre.
  
In February, Swiss bank UBS handed over information on up to 300 clients to the US government and paid a fine of 780 million dollars to settle a case in which it was accused of abetting tax fraud by US clients.
  
The US government has filed a separate lawsuit to try to force UBS to disclose the identities of 52,000 US customers who allegedly evaded taxes.
  
France and Germany last week proposed that G20 members punish countries deemed to be "uncooperative" tax havens by breaking off bilateral fiscal conventions with them.
  
Facing such pressure, Switzerland, Austria and Luxembourg are showing a new willingness to pull back the shroud of banking secrecy, accepting to help in cases of abuse.
  
The Swiss minister said this week that his government could extend an existing withholding tax arrangement with the European Union to other countries as well.
  
Under the arrangement, Swiss authorities apply a withholding tax on interest on the savings accounts of EU bank clients rather than revealing their identities to European authorities.
  
The arrangement is also used among EU countries in the case of Austria, Luxembourg and Belgium.
  
Luxembourg, also an important international financial hub thanks to its bank secrecy rules, has indicated that it is ready "to discuss" the possibility of sharing some banking client information with other EU countries.
  
The three countries dismiss accusations of being tax havens and have shown no inclination of completely abandoning bank secrecy. "I cannot imagine abolishing banking secrecy. It is part of the social attitude of our country," Merz said last week.

Date created : 2009-03-08

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