Results tagged “swiss offshore banking”

Switzerland beats New York London and Singapore in a new ranking by Scorpio Partnership for the financial center that best caters for the world's rich.

"To the mobile wealthy, Switzerland is very nearly all things to all people," said Scorpio Director Stephen Wall. It "has been and will continue to be the biggest beneficiary of moves away from London."

This despite recent concerns over the state of Swiss offshore banking and bank secrecy.

It is estimated that Swiss banks currently manage 27% of offshore wealth that is privately held. London still remains in a strong position,  but has been damaged by insecurity over proposed changes in government legislation, according to the London-based wealth management adviser

While London retains "an inherently strong position," it ranks second after damage resulting from "recent regulatory and fiscal changes," Scorpio said.

The U.K. government's changes have "engendered a sense of mistrust and uncertainty among the mobile wealthy and their advisers," said Scorpio Managing Partner Sebastian Dovey.

Professionals such as doctors, lawyers and entrepreneurs who make up majority of the world's rich are those defined as the "mobile wealthy" by Scorpio

Here's the ranking of  the world's top "mobile wealthy residency" centers:

1. Switzerland
2. London
3. Singapore
4. New York
5. Hong Kong
6. Jersey
7. Cayman
8. Isle of Man
9. Monaco
10. Dubai
11. Guernsey

Source: Bloomberg

Swiss Offshore Banking is still in a strong position according to the chairman of Swiss Bank Julius Baer, Raymond Baer. His statement comes as international investors fear for the privacy of their Swiss bank accounts following Switzerland's decision to adopt OECD regulations regarding information exchange.

"International clients will continue to appreciate the financial privacy traditionally anchored in Switzerland," he said, indicating that Switzerland's reputation may keep it afloat.

"Decisive is that the core of banking secrecy, the protection of privacy, is kept and that it doesn't come to an automatic exchange of information," he added.

These comments are likely to unnerve global leaders and charities looking for blanket adoption of the OECD rules by tax havens like Switzerland. Without automatic exchange of information it could take years for 'stolen' money from tax evasion cases to be repatriated.

Switzerland, Austria and Luxembourg said today that they would abide by OECD rules and cooperate on sharing information about customers with other countries on a case-by-case basis, but not automatically, as many countries want.

"The decision will permit the exchange of information with other countries in individual cases where a specific and justified request has been made," the Swiss government said.

Switzerland will now cooperate in cases of suspected tax evasion, at least once double taxation agreements are renegotiated with other countries, which could take time. It also said it could seek an amnesty for existing clients.

Andorra and Liechtenstein on Thursday and now the big three in Europe, all were on a list presented to the G20 this week by the Organization for Economic Cooperation and Development (OECD) of financial centers where it deems bank secrecy rules to be too favorable for tax evasion.

Britain's crown dependencies and overseas territories are scrambling to defend themselves against the latest rhetoric issued by high-tax countries.

Supposedly 'leading' offshore centres are pleading for a more discriminate approach to distinguish themselves from the 'dirtier' unregulated tax havens.

Geoff Cook of Jersey Finance, which represents the island's financial industry, says: "The thing we worry about is we are being tarred with the same brush as everyone else."

Of international leaders: "They are desperate to find any way they can of increasing their tax collection and they are desperate to deflect attention away from the domestic situation."

The Cayman Islands took a similar stance:"We fear a very indiscriminate position will be
taken which owes more to protectionism and prejudice than judgement and intellectual application,"  said Deborah Drummond, deputy financial secretary of the Islands.

Last week the US administration offered encouragement for new anti-tax haven legislation that builds on the 'stop tax haven abuse act' introduced by then Senator Obama. If passed, numerous tax havens, among them many British colonies and territories may find themselves on the receiving end of sanctions which force them to be more transparent. The UK, Germany and France have also called for a crackdown on tax havens, hoping to make it a top issue at April's G20 summit.

Tax evasion scandals linked to swiss offshore banking and Liechtenstein have increased pressure, as has the banking crisis, when it was revealed that banks were some of the heaviest users of offshore jurisdictions.

Although it is widely opined by experts that offshore banking is not a major factor in the global financial crisis, many governments may find it easy to target offshore tax havens, leveraging on their close links to the banking sector.

The IRS is working out revised rules for its Qualified Intermediary program, which allows the U.S government to keep track of American money abroad.

As Senior IRS lawyer said the US was working in tandem with other high-tax Governments to round up tax evaders with accounts in offshore tax havens.

"We are concerned about U.S. people hiding their assets and not reporting their correct worldwide income," said Steven Musher, IRS associate chief counsel for international issues.

A date was not given for the release of the revised QI rules, but Musher suggested they may not be overly oppressive in order to allow banks some legroom, "We are trying to achieve the balance between increasing the reliability and quality of documentation to serve these various competing purposes," he said.

The IRS is keeping quiet on its latest action against UBS, with senior UBS officer Mark Branson to face a  U.S. Senate Permanent Subcommittee today.

Swiss offshore banking could the one to face the brunt of the tax haven crackdown with politicians unlikely to remain aloof from the media and public opinion.

Switzerland's finance minister has raised the possibility of bargaining in certain cases over Swiss bank secrecy.

"Certain matters of fact must be up for debate," said Hans-Rudolf Merz, who also holds the country's presidency.
"We will perhaps have to make concessions in some cases or others.'

Merz also suggested that Switzerland may have to make these concessions in order to avoid the threat of inclusion on an OECD or G20 blacklist that would see Switzerland branded as an un-cooperative tax haven.

French President Nicolas Sarkozy has already hinted that Switzerland would be blacklisted if the current situation continued.

Being put on a blacklist could mean economic sanctions against Switzerland or directives ordering banks in OECD/G20 countries to either not bank with Switzerland or apply much stricter regulations on funds of Swiss origin.

There is speculation over whether such 'concessions' would mean fundamental changes in Swiss offshore banking and bank secrecy, or merely the release of more UBS clients currently under investigation.

Calls for changes to the secrecy law have met with almost universal dissaproval domestically, with many Swiss unwilling to change centuries of tradition or risk harming the 'golden goose' that funds a huge banking sector.