MercoPress. South Atlantic News Agency

Tax havens agree to relax bank secrecy laws

PM Brown said tax evasion

British Prime Minister Gordon Brown hailed announcement that Switzerland is relaxing key bank secrecy laws as “the beginning of the end of tax havens.”

“I welcome announcements in the last few days from Hong Kong, Singapore, Andorra, Liechtenstein and now Switzerland that they will accept international standards that stop tax evasion” Brown said.

The British PM said tax evasion “costs the global economy billions of pounds each year.”

Switzerland, Austria and Luxembourg this week offered to relax strict bank secrecy in some tax evasion cases in a response to a global crackdown on tax havens that is rattling the offshore banking industry.

The three countries made the concessions ahead of a meeting of finance ministers from the G20 group of developed and emerging countries due to discuss tax havens, and after similar moves by Andorra and Liechtenstein on Thursday.

All were on a list handed to the G20 this week by the Organisation for Economic Co-operation and Development (OECD) of financial centres where it deems bank secrecy rules as undesirable.

Switzerland, Austria and Luxembourg said Thursday they would abide by OECD rules by co-operating on sharing information about savers with other countries on a case-by-case basis, but not automatically, as many countries want.

Switzerland will now co-operate in cases of suspected tax evasion, at least once double taxation agreements are renegotiated with other countries, which could take time. It also said it could seek an amnesty for existing clients.

Even when abiding by international rules on bank data sharing, Switzerland said it would only respond to “concrete and justified” requests. The government added that it would still protect banking customers from “unjustified watching from abroad”.

Previously, the world's biggest offshore centre would only co-operate with foreign authorities when they could prove outright tax fraud, which has hindered US access to client data of Switzerland's biggest bank UBS in a tax probe.

It is estimated that Switzerland's banks hold 2 trillion US dollars of global wealth held abroad. The US government believes it looses 100 billion US dollars in revenues every year because of tax havens.