Swiss hunt Italian agents as tax row deepens

By Reuters Staff
October 29, 2009

ROME, Oct 29 (Reuters) – A row between Italy and Switzerland over tax evasion deepened on Thursday with one Swiss region launching a hunt for Italian agents trespassing on its soil as Rome warned against retaliation for its raids on Swiss banks.

Relations took a turn for the worse on Wednesday when Bern summoned the Italian ambassador to demand an explanation of the raids by police and tax inspectors on 76
Swiss bank branches in northern Italy and around the tiny enclave of San Marino.

Italy said the operation was aimed at ensuring all relevant data was being provided to tax authorities to assist a crackdown on widespread tax evasion.

Rome launched an amnesty this month to recover billions of euros illegally stashed in foreign tax havens, including Switzerland, but it accuses Berne of not playing ball.

Foreign Minister Franco Frattini warned Swiss authorities against taking reciprocal action that might further damage relations.

“I don’t think the path of measure and counter-measure is the correct one,” he told journalists at an EU summit in Brussels. “Counter-measures certainly do not help.”

However, the municipal government of Chiasso, a border area in the Italian-speaking Swiss canton of Ticino, said in a statement on Thursday it was starting checks for suspected Italian tax agents operating without permission in Switzerland.

“Following many warnings about unauthorised investigative activity in the territory of Chiasso, the municipality has arranged checks in collaboration with the canton police and border guards,” it said in a statement.
“The population is invited to cooperate in this sense.”

Relations between the two countries have soured since Italy approved the generous tax amnesty aimed at recovering billions of euros illicitly stashed overseas, as it scrambles for money to help plug a deficit due to top 5 percent of GDP this year.

Italy’s conservative government published a list this month of 36 countries — deemed to be cooperating with tax authorities by providing information — where funds can be declared and a one-off penalty paid without having to repatriate them.

Switzerland, concerned the amnesty could drain large sums from its banks as they seek to emerge from the credit crunch, was not included in the list. Italy’s tax authorities estimate Italians have 125 billion euros in Switzerland.

Swiss bank UBS confirmed its offices in Italy were visited by tax police on Wednesday. Credit Suisse declined to comment.

The raids were carried out on the day Switzerland’s president and finance minister, Hans Rudolf Merz, said in an interview in an Italian newspaper that his country was ready to cooperate on tax matters.

However, he told Il Sole 24 Ore that Italy’s alleged use of border surveillance, including cameras, and unsanctioned investigations by Italian agents in Switzerland was “unacceptable” and would not help bilateral ties.

The global financial crisis has prompted governments worldwide to crack down on tax havens or declare amnesties in their efforts to uncover extra funds for flagging budgets.

Switzerland came to an agreement with U.S. authorities earlier this year in a dispute over taxation which pierced its banking secrecy.
((daniel.flynn@thomsonreuters.com; +39 06 8522 4394; Reuters messaging: daniel.flynn.reuters.com@reuters.net, Rome Newsroom; Editing by Victoria Main))
Keywords: ITALY BANKS/SWITZERLAND

Thursday, 29 October 2009 13:22:55RTRS [nLT408626 ] {C}ENDS

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