Switzerland introduced the automatic exchange of information of data concerning bank customers at the beginning of this year. Swiss private banks now warn the government that the planned extension of the system to a further set of countries may endanger their wealthy clients in some of the highly corrupt partner states.
The Association of Swiss Private Banks (ASPB) has sent a letter to Ueli Maurer, the right-wing Swiss finance minister in charge of the automatic exchange of information (AEoI) introduced at the beginning of the year. In their answer to a consultation process for an extension of AEoI to a further 41 countries, the nine private banks sound the alarm bells.
Banks including Pictet or Lombard Odier are concerned about exchanging information about their clients with countries such as Russia or China.
Physical Dangers
The system is already in use in exchange with some 38 countries. Next year, the Swiss banks will be required to automatically send their clients’ data for the year 2017 to the relevant authorities. And a whole range of countries are due follow a year later.
The private banks are concerned about the physical well-being of their clientele. «This does not concern taxation, but clients’ physical safety, given the risk of corruption and political manipulation in their home countries,» ASPB says in its letter to the government.
Safety Mechanism Required
The group demands the introduction of a safety mechanism, requiring the federal administration to evaluate the data in respect to confidentiality and potential risks to their clients, with a view to prevent information being sent that might endanger a bank customer.
Private banks also demand that information should also be sent only if rival financial markets agree to do the same.
U.S.: New Tax Haven?
The private banks rightly criticize the fact that the U.S. refused to join the system and is about to become a new offshore tax haven. Swiss bankers have said that money already was being moved to the U.S. following the introduction of the treaty.
The private banks aren’t alone in criticizing the extension of the system. Alliancefinance, (release in German), an association of wealth managers, financial-service providers, fiduciaries, lawyers and industry groups, has also been highly critical about the extension. It said that some of the 41 countries involved figured prominently on the global corruption index.
Source: Finews.com
Photo credit: pixelfrenzy via Visualhunt / CC BY-NC-SA
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