Photo : Christian Adnin
Pierre Mirabaud, Senior Partner of Mirabaud & Cie, a private bank founded in Geneva in 1819, has announced his resignation from the position of President of the Swiss Bankers Association (SBA) that he has held for six years. Patrick Odier of the bank Lombard Odier Darier Hentsch & Cie has been unanimously appointed as his successor as of 17 September.
Commerce International: How did you react, a little before the G20 in London, to the inclusion of Switzerland on a black (and subsequently “grey”) list of non-cooperative countries regarding tax information exchange established by the OECD?
Pierre Mirabaud: “Switzerland has never been included on any black list! There was speculation about whether this might occur, but finally, no black list emerged. Before the publication of the OECD’s working document for the London G20, Switzerland in fact declared that it would agree to transposing the provisions of Article 26 of the OECD tax convention model in its conventions on double taxation.”
So how do you explain why fingers are currently being pointed at Switzerland by the international community?
P.M.: ”Confronted by a financial and economic crisis of an extent that no one could have imagined, large European countries are facing gigantic deficits, and their Ministers of Finance are seeking tax income at any cost. In this context, it is easier for them to point their fingers at Switzerland – a small country which, moreover, is not a member of the European Union – than to modify their own tax practices, which, in certain countries like Germany, are so complicated and disadvantageous for citizens that they incite tax evasion. I would not say that Switzerland is a scapegoat, but it is paying the price of its success in wealth management activities. The notion of protection of the private sphere and bank client confidential-ity as we conceive it in Switzerland is not always understood overseas.”
On this note, how can Swiss bank secrecy be justified?
P.M.: ”Bank secrecy has never been absolute, and Swiss legislation is very clear on what secrecy should and should not protect – confidentiality never obstructs the slightest penal investigation, for example. More generally, we have a system in which the State is at the service of its tax payers and where the latter place their trust in the State – they can notably express themselves via direct democracy, and have a right to see how State revenue is spent. In other countries, we have instead the impression that it is the citizens who are at the service of the State, in that the latter squeezes them like lemons! So one must not be surprised that certain citizens no longer trust their States in terms of tax.”
How do mutual legal assistance and mutual administrative assistance work today?
P.M.: “Mutual legal assistance exists with all partner countries. Switzerland communicates all necessary tax information via a judgment, for tax fraud, terrorism and money laundering issues. As for mutual administrative assistance between tax authorities in the case of suspicion of tax evasion, the State making the request must have signed a double taxation convention with Switzerland. Seventy-four conventions of this type are in place today; they must now be amended or renegotiated for certain States in order to include Article 26 provisions from the OECD tax convention model, as Switzerland committed to do so a little before the London G20.”
What legal issues arise in case of non-respect of bank secrecy?
P.M.: “The federal law on banks in Switzerland foresees a strict protection of the confidentiality of clients, Swiss and foreigners alike, and any bank employee who does not respect this confidentiality faces severe penalties going as far as imprisonment. Any banker who divulges information on client affairs to non-authorised third parties commits a penal offence. As far as mutual legal assistance goes, confidentiality can be raised by a Swiss judge, whereas for mutual administrative assistance, it is the Swiss tax authority that responds to its foreign counterpart.”
In your opinion, how far can Switzerland go in international cooperation for communicating tax information without putting in question bank secrecy?
P.M.: “The Swiss solution entirely protects the confidentiality of clients not being pursued in their countries for tax offences. By conceiving Article 26 of the OECD tax convention model, States have not agreed to automatically divulge tax information, but rather exchange information upon request. So three conditions are necessary for confidentiality to be lifted and for the bank to transmit information to foreign tax authorities: any request originating from overseas should be based on a specific suspicion of fraud or tax evasion, it must also indicate the name of the suspect and that of the bank in question. In other terms, this approach proscribes the “fishing expeditions” initiated by American tax authorities against the UBS at the start of the year.”
What measures are advocated by the Swiss Bankers Association?
P.M.: “The SBA supported the decisions taken by the government, and its members will respect, as they have always done so, the new provisions that will be implemented. The latter will have to be endorsed by the Parliament – in Switzerland, double taxation conventions must be submitted to the people’s representatives – and may even be the object of a referendum. The Swiss people will therefore have to normalise these new practices,and I am confident that they will do so.”
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