Switzerland: Banking secrecy weakens with automatic exchange within 2018

8 years ago - Published in Finance, Fiscal & Legal

Switzerland on Friday ratified the automatic exchange of financial account information with 40 other jurisdictions, among which are several emerging markets such as Brazil, Mexico and Russia, to facilitate immediate sharing of details of suspected black money, even as it sought strict adherence to confidentiality and data security.

But before the exchange takes place, the government will now prepare a "situation report", it said in a statement.

The Swiss Federal Council said that the implementation of the information exchange is planned for 2018 and that the first set of data exchange would happen in 2019. In this regard, the Council has reportedly adopted the dispatch on the introduction of the AEOI (Automatic Exchange of Information), a global convention for automatic information exchange on tax matters.

The exchange of information will reportedly be carried out in accordance with the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information.
“In the process, it will be checked whether the states and territories concerned effectively meet the requirements under the standard, especially those concerning confidentiality and data security. It is important for the Federal Council that a level playing field be created among states and that all major financial centres, in particular, be included. This year, Switzerland has introduced the AEOI with 38 states and territories, including all EU member states, and data will start to be exchanged with them in 2018,” it added.

If Switzerland finds requirements are not met with specific countries, it could suspend the exchange of data with these jurisdictions. No reports are planned for the 2018 batch of countries. Parliament will vote on the government's recommendation.

The participation of Switzerland, the world's largest centre for overseas wealth, in the data exchange agreement was heralded at the time as a major breakthrough in tackling tax avoidance.