Switzerland agrees to share private financial data under OECD rules

[JURIST] The government of Switzerland [official website; JURIST news archive] said Friday it will follow standards [press release] set by the Organisation for Economic Cooperation and Development (OECD) [official website], adopting a more stringent definition of tax evasion and agreeing to cooperate with other countries in evasion investigations. Unlike many other countries, Switzerland differentiates between tax fraud and tax evasion [NY Times report], and tax evasion is not a crime. While this policy has not changed, by adopting the definition of tax evasion under Article 26 of the OECD Model Tax Convention [text, PDF] Switzerland will henceforward share information "with other countries in individual cases where a specific and justified request has been made." The Swiss government also made clear that by adopting the OECD definition it was not ending bank secrecy. A statement [press release] by the Federal Department of Finance on Saturday said that while the situation for non-resident foreigners has changed, the "decision will have no bearing on legally resident foreigners in Switzerland."

Owners of Swiss bank accounts have traditionally enjoyed great privacy, but Swiss banks have recently released information on certain clients. Earlier this month, UBS [corporate website] closed more than 14,000 accounts [USA Today report} owned by US citizens following a court settlement over accusations it assisted its clients with tax evasion. In 2006, the Swiss Justice Ministry [official website] granted US investigators access to information [JURIST report] about bank accounts of terrorism suspects. Prosecutors in the US Attorney's Office for the Eastern District of Virginia [official website] requested the information in a four-year old investigation into money laundering to support terrorist activities. Earlier the same year, the Swiss Supreme Court denied a Russian request [JURIST report] for the transfer of bank documents to Russia [JURIST news archive] which were relevant to an ongoing investigation into Russian oil giant Yukos [corporate website; JURIST news archive].



 

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