After a short public consultation the amendment to banking secrecy law was introduced as a revision of the Tax Administrative Assistance Act.
In 2011, the Organisation of Economic Cooperation and Development (OECD) advised Switzerland to take measures to increase its tax transparency to avoid being globally blacklisted. It is hoped the amendment will help to meet these requirements.
The change states the foreign country must prove that telling the suspect would hinder the investigation.
It has raised questions about whether such a move goes against guarantees of transparency featured in the Swiss constitution. But a majority decision concluded that passing the amendment was in the country’s best interests to meet the OECDs demands.
The revision must be re-approved at the end of the current legislative session to become law. This formality is expected to pass with little opposition.
The cabinet refused attempts to loosen requirements when dealing with stolen tax data. It had wanted to allow such information to be sent to other countries as long as those countries did not help to procure it, but outcries from critics who said this would incentivise data theft dissuaded them.
Switzerland’s tax secrecy has long been criticised. In 2009 Swiss bank UBS paid a $780m fine for helping tax evaders hide their money. Credit Suisse recently appeared before the US Senate for similar charges.
Last October, Zurich based Bank Frey voluntarily closed its doors in the wake of US efforts to crack down on tax avoidance. The private bank was the subject of an American investigation into the use of Swiss banks to facilitate tax evasion.
In a statement the bank said it was“financially healthy and will not be liquidated” and that its closure had been taken “voluntarily, and as a result of an analysis of the overall circumstances”.
