Swiss Parliament sides with I.R.S. in deal to expose potential tax evaders

The Swiss Parliament agreed today to uphold an August 2009 arrangement with the United States, whereby UBS, Switzerland’s largest bank, would disclose information on 4,500 accounts held by Americans suspected of tax evasion.

Lynnley Browning of The New York Times reports that “The parliamentary approval was a watershed moment in the history of Swiss private banking, whose tradition of client confidentiality goes back centuries.”

The decision, which represents months of legal and diplomatic efforts, will likely be used as a template to pursue tax fraud and tax evasion perpetrated in conjunction with other banks in Switzerland, such as Credit Suisse and HSBC, as well as operations in such burgeoning tax havens as Hong Kong and Singapore.

Hong Kong warns banks about tax evasion

The Hong Kong government has sent a letter to the top executives of all banks in the city warning them not to assist any clients in evading taxes, whether domestic or foreign taxes.

Karen Kemp, executive director of banking policy for Hong Kong, said in the letter that any banks that facilitate tax evasion could be prosecuted for money laundering.

"Further, it goes without saying that [banks] should not market themselves or schemes operated by them as being available for this purpose or incentivise their staff (whether through payments or bonuses or otherwise) to engage in such conduct," Kemp said.

 

The letter comes in advance of tax-information exchange treaties that Hong Kong expects to work out with the U.S. and other countries.