banking

Last week, the German government said that Switzerland should be placed on the international blacklist for tax havens. Really? That is, according to Peer Steinbruck (German finance minister):

Speaking to reporters in Paris after a conference on measures to combat tax avoidance, Steinbrück said Switzerland deserved to be on the list being drawn up by the Organization for Economic Cooperation and Development because Swiss investment conditions encouraged some German taxpayers to commit fraud.

The French budget minister, Eric Woerth, even raised the prospect of ‘retaliatory measures’ (these are FATF’s, who knows what the French’s are) against “territories that refused to exchange tax information” with the money police in other countries, from international code thought up by the OECD.

France and Germany are determined to raise the pressure on countries that refuse to exchange tax records. They believe the financial crisis, with calls for market regulation and a downturn in tax receipts, will inject political impetus into the OECD’s hitherto technical efforts to clampdown on uncooperative tax havens.

Countries like France and Germany are looking to put increased pressure on countries–who provide a financial service to their citizens–participating in what they claim are “harmful tax practices.” Here is a bit from OECD’s Centre for Tax Policy and Administration that sums up their alleged ‘reasoning’:

Competitive forces have encouraged countries to make their tax systems more attractive to investors. However, some tax practices are anti-competitive and undermine fair competition and public confidence in tax systems. OECD and non-OECD economies are working together through the Global Forum to address harmful tax practices by improving transparency and establishing effective exchange of information.

That sounds eerily familiar and a bit contrived.

Unfortunately for them, as I have pointed out in an earlier post, tax avoidance is not exactly a crime in Switzerland–and Swiss law interprets tax crime differently than most.

Swiss banking and tax laws make Switzerland a desirable place for those who don’t like being robbed by their governments to keep their money or even relocate to.  Along with the other so-called tax havens, Switzerland is now being targeted for being good at what they do.  And of course ‘blacklisting’ these countries gives those bureaucracies obsessed with appropriating people’s money an excuse to try and do an end-run around sovereignty.