Financial Regulatory Forum

Switzerland says goodbye to light touch regulation

By Rachel Wolcott

LONDON, May 3 (Thomson Reuters Accelus) - These days even the Swiss are fed up with their bankers. The financial crisis has riled Swiss citizens to the point that the Alpine country’s reputation for light-touch financial regulation will soon be a thing of the past. In a direct democracy such as Switzerland, where every citizen can vote on laws and even propose them, the people have spoken. What they have said is: we want more rules and regulation for bankers and asset managers.

“In the past people were against regulations which seemed too restrictive, but this is changing. The public mood is still critical vis-à-vis the banks and the culture of big bonuses for board of directors and management. Now we may see overregulation also because of the immediate political pressure facing a direct democracy,” Marc Raggenbass, head of the regulatory, compliance and legal practice at Deloitte in Zurich, told Thomson Reuters. (more…)

ANALYSIS-Asia next in line of fire for U.S. tax police

By Jason Rhodes, Kevin Lim and Joe Rauch

ZURICH/SINGAPORE/CHARLOTTE, July 7 (Reuters) – After forcing Switzerland’s top bank UBS  to its knees for helping U.S. residents dodge taxes, U.S. authorities are moving on other banks and countries used to hide clients’ cash.

Washington inflicted a tough lesson last year on Switzerland by forcing the world’s biggest offshore banking centre to lift its treasured bank secrecy and slapping a $780-million penalty on UBS.

The Department of Justice is now going after other offshore centres like Singapore, which have attracted undeclared money that left Switzerland, and has opened a criminal inquiry into Asian clients of Britain’s HSBC Holdings Plc, Europe’s No. 1 bank.

SPECIAL REPORT – How the U.S. cracked open secret vaults at UBS

* To read this story in PDF format, please click here:

By Lisa Jucca

ZURICH, April 9 (Reuters)- After the collapse of Lehman Brothers in September 2008, Switzerland’s largest bank was teetering. UBS, which was more than three times bigger than Lehman in terms of assets, had to write down some $50 billion during that tumultuous period.

Investors the world over breathed a sigh of relief on Oct. 16 when the Swiss government rescued UBS. But unbeknownst to them at the time, the bank faced a potentially devastating crisis on a very different front.

One day after the bailout, top executives from UBS and Swiss regulators were summoned to a closed-door meeting in New York by U.S. officials who were conducting a wide-ranging tax fraud investigation that centered on the bank.

IRS to take “macro” approach on U.S. foreign bank law

By Kim Dixon

WASHINGTON, March 2 (Reuters) – Foreign banks will likely not need to identify holders of millions of U.S. accounts individually, a top U.S. tax official said, in the run-up to a new reporting law aimed at catching wealthy tax dodgers.

The law, expected to be passed by the U.S. Congress in coming months, would slap a 30 percent withholding tax on U.S. income of foreign financial institutions if they fail to report U.S. account holders, among other provisions.

It comes amid sharpened focus on wealthy Americans stashing funds abroad, in particular after a landmark settlement with the Swiss bank UBS AG  last year in which the bank admitted it actively helped Americans dodge billions in taxes.

France draws up tax blacklist, to apply sanctions

PARIS, Feb 16 (Reuters) – France has drawn up a list of 18 countries accused of failing to cooperate on tax issues, and will slap punitive taxes on certain financial transactions involving them, an official document showed on Tuesday.

The document, obtained by Reuters, was signed by Economy Minister Christine Lagarde and Budget Minister Eric Woerth and lists Central American and Asian countries as well as tiny Caribbean and Pacific island nations.

Dated Feb. 12, it does not mention any European countries.

Under a French law passed late last year, a 50 percent tax will be slapped on dividends, interest, royalties and service fees paid by a person based in France to a beneficiary based in one of the listed countries. This will be applied as of March 1. The previous tax was 15 percent.

U.S. tax guilty plea involves unspecified major UK bank, Zurich banker

By Kim Dixon

ALEXANDRIA, Va., Feb 16 (Reuters) – A U.S. client of a big global bank based in England pleaded guilty to conspiracy in connection with assets stashed abroad to evade taxes, part of a widening crackdown on foreign banks and their customers.

The plea is the first among the government’s recent tax prosecutions that involves a major bank other than Swiss banking giant UBS AG. UBS last year admitted that it actively helped U.S. clients to hide money abroad.

Andrew Silva, of Sterling, Virginia, a doctor, pleaded guilty in U.S. District Court for the Eastern District of Virginia to conspiracy to defraud the U.S. government by hiding about $250,000 in a Swiss account of that British bank.

Swiss minister says US insists on UBS tax deal – paper

ZURICH, Feb 11 (Reuters) – The Swiss government will probably have to turn to parliament to resolve a legal impasse threatening a deal struck with the United States to hand over data from UBS AG clients, a minister was quoted as saying.

The Swiss government had raised the option of parliament retroactively approving the deal, involving UBS clients suspected of dodging taxes, after a Swiss court ruled in favour of a UBS client seeking to prevent her account data from being given to the U.S. tax agency.

But the government’s preferred solution has so far been to negotiate a way out, hoping the United States would drop the issue if more than 10,000 UBS clients had turned themselves in voluntarily.

Merkel tries to calm tempers in Swiss tax dispute

Wanted in Switzerland

Wanted in Switzerland

By Madeline Chambers

BERLIN, Feb 8 (Reuters) – German Chancellor Angela Merkel and Switzerland’s president have agreed that a dispute over stolen Swiss bank account data which Germany wants to buy should not harm ties between the neighbours, her spokesman said on Monday.

Merkel, who spoke to President Doris Leuthard on Saturday in an effort to calm tempers, also recieved assurances Switzerland would continue talks on a double taxation deal that would bring Switzerland into line with OECD standards.

Switzerland’s large private banking industry has been shaken in the last week by German politicians saying they would pay for data on clients of Swiss banks who may have been evading German taxes even if the information was obtained illegally.

German state ready to buy stolen bank data-source

BERLIN, Feb 4 (Reuters) – Germany’s most populous state has made final checks on stolen bank data belonging to potential tax cheats and is ready to buy the information, a person familiar with the matter told Reuters on Thursday.

“We have finished the examination,” said a source from the financial authorities of the state of North Rhine-Westphalia. “The groundwork has thus been laid to acquire the data.”

German Finance Minister Wolfgang Schaeuble sent shivers through the large Swiss private banking industry this week when he said Berlin was prepared to pay for stolen data belonging to potential tax dodgers at a Swiss bank.

European states keep Swiss bank secrecy under siege

By Jason Rhodes and Ben Berkowitz

BERNE/AMSTERDAM, Feb 3 (Reuters) – European states lined up behind German Chancellor Angela Merkel to expose tax cheats in a combined assault on the Swiss banking secrecy laws that help protect them.

German Finance Minister Wolfgang Schaeuble sent shivers through the large Swiss private banking industry this week when he said Berlin was prepared to pay for stolen data belonging to potential tax cheats at a Swiss bank, raising the bar in the fight against tax evasion.

Now, the Dutch, Belgian and Austrian governments have also flagged interest in obtaining a copy of a compact disc with tax-sensitive data that Berlin may soon buy from an informant.