Switzerland stopped French investigations over Falciani files

8 years ago - Published in Finance, Fiscal & Legal

French magistrates are investigating 26 individuals or institutions suspected of hiding huge sums of money in tax havens through Panama, the Seychelles, Switzerland, Hong Kong and Singapore. Tax authorities are looking into 416 suspected tax dodgers in an inquiry sparked by last year's Panama Papers revelations, according to Le Monde newspaper.

The investigators are part of an elite white-collar crime unit set up following revelations that then finance minister Jérôme Cahuzac had dodged tax through a secret Swiss bank account.

The targets are either wealthy individuals believed to have hidden millions in shell companies or banks, lawyers and other intermediaries believed to have helped them.

Despite having netted billions of euros in unpaid taxes since its establishment, the anti-corruption unit is suffering from insufficient resources, lack of recognition from the upper levels of the police and political pressures, according to a letter signed by 25 of its agents sent to the chief of police, the Mediapart website revealed last month.

So, Switzerland may be one of the "not-helping" country: tax fraud investigators received a blow from the Alpine country on Wednesday when a court ruled that the authorities must not cooperate with the Swissleaks investigation.

The federal tax administration at first gave a positive response to a French request for help in a probe targeting a couple accused of tax-dodging. Their data was among a large number of HSBC files illegally leaked to France by whistleblower Hervé Falciani in 2008.

So the court ordered the authorities not to help the inquiry because the suspects were identified by files stolen by former HSBC employee.

"There is no disputing the reprehensible origins of the Falciani data," the ruling said, recalling that a Swiss court in 2015 sentenced him in absentia to five years in prison.

Following the court ruling, France committed to not using any information linked to him when seeking further legal assistance from Switzerland.

Last year, the Organisation for Economic Cooperation and Development’s (OECD) Global Forum unit awarded Switzerland a “largely compliant” status when reviewing the country’s record on assisting tax evasion probes. One negative mark was Switzerland’s refusal to help out on the basis of stolen data.