Swiss travel the world to help mega-rich evade taxes
By Lucy Komisar
March 25, 2007
The NY Times headline yesterday said, “Discreet Swiss Banks Now Offering Sophisticated Investment Vehicles.” Further down, the story noted that Geneva has becomes an “aggressive haven for the global elite.” And, “Now the Swiss can be found throughout the world, selling more sophisticated investment vehicles to attract high-net-worth individuals, mostly multimillionaires.”
So what is the real story about? The headline should have been, “Discreet Swiss travel the world to help the mega-rich evade taxes by stashing their money in the world’s favorite offshore center.”
How else has Switzerland, with only 7.5 million people, become the third-largest asset manager in the world, after the United States and Britain, with global banking assets under management of $5.5 trillion?
Switzerland also has become the third-largest commodities trading center, after New York and London. Are those profits reported to home countries? Hmmmm.
The reporter, John Tagliabue, says, “Not surprisingly, many of the country’s detractors complain that Switzerland remains the world’s prime tax haven. The European Union and the Organization for Economic Cooperation and Development have pressured Switzerland to loosen its bank secrecy.”
Pressured? All the EU and OECD countries have to do is refuse to accept wire transfers from the secret Swiss accounts. Nobel laureate Joseph Stiglitz says that’s the way to end bank secrecy.
And now, there’s competition. “Dubai and Singapore have cultivated sophisticated private banking hubs, offering discreet financial services and a tax haven aimed at luring away wealthy clients. And just as the Swiss have moved overseas, foreign banks like Citibank have flocked to Switzerland.” Citibank has a lot of experience in tax evasion. See past articles.
Tagliabue points out that “Unlike regulations in the United States, Swiss law forbids bankers from divulging information about clients or their assets, under threat of penalty. Tax evasion is not considered a crime.” Bank secrecy, a top banker says, is “the principal pillar of the Swiss financial place.”
Sophisticated? I’d call the Swiss operations accessories to theft from the ordinary citizens of the world.
That’s the story that should have made the headline.