Switzerland is known to the world
as famous for chocolate,
watches, and more importantly, confidential bank accounts. Banking
secrecy is an integral part of the national banking system, where investors
can hide their wealth. This is one of the key reasons behind Switzerland's
becoming the biggest offshore banking-services center in the world. However, its
bank secrecy laws came under increasing scrutiny when the US government
decided to take measures against tax havens all over the world. Over the
years, after refusing to reveal information about their customers to foreign
governments, top offshore tax havens like Switzerland, Luxembourg and
Austria have bowed to international pressure and agreed to comply with the
information-sharing standards established by the Organization for Economic
Cooperation and Development (OECD).
Often Swiss bank accounts are viewed as a tool to hide
huge wealth by affluent Americans and Europeans, African dictators and Russian
oligarchs. During the recent boom period, trillions of dollars
flowed into Switzerland and other tax havens in search
of safety owing to the tax haven nature of their banks. At the end of
2008, around €1.47 tn in assets were deposited
in Swiss banks, including about €450 bn of clandestine personal wealth
that belonged to private customers. Banks in Switzerland, which employ
about 3% of the total working population and contribute more than about 13%
of GDP to the economy, have often come under criticism for their secrecy
laws. The Union Bank of Switzerland (UBS), the largest Swiss bank,
was in the limelight recently due to a lawsuit involving US tax
investigation. American tax authorities had accused
many of its employees of helping American citizens to set up and conceal
offshore accounts by falsifying, and destroying important information. It is being
projected as a major blow and even as the beginning of the end
of the fabled secrecy of the Swiss banking system. |
