Swiss Bankers Call on Government in U.S. Tax Row

Posted September 5th, 2011 at 1:11 pm (UTC-5)
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The chairman of the Swiss Bankers Association has called on the government to create a “united front” representing Swiss interests in the face of a growing tax dispute with Washington.

Swiss news reports on Sunday said the United States had presented an ultimatum to Switzerland, demanding that it provide detailed information on thousands of U.S. citizens suspected of using Swiss bank accounts to cheat on their taxes.

In prepared notes, Chariman Patrick Odier on Monday said Swiss banking secrecy safeguarded financial privacy, and that assets were protected — not hidden.

Odier later told journalists that Switzerland is “not a banana republic” and that any solution had to abide by Swiss laws.

But he said Switzerland’s role as a global financial center could not be successful without doing business with the United States. Switzerland already has two double taxation agreements with the United States.

Last year, the Swiss parliament approved a deal permitting Swiss banking giant UBS to provide the names of nearly 4,500 U.S. clients suspected of hiding millions of dollars to avoid paying U.S. taxes.

U.S. officials later said many of those clients switched their assets to smaller banks. Press reports Sunday said U.S. authorities were currently demanding information from as many as nine smaller Swiss banks.

Odier said that U.S. public prosecutors were being “too tough” in their pursuit of tax evaders, while acknowledging that past business conduct by some Swiss bankers may have been “too careless.”

He said the situation had reached the point where the banking sector could no longer solve the problem on its own, and called on the Swiss government to step in.

Switzerland recently signed new tax agreements with Germany and Britain.