Nov 09 2011

The U.S. got serious about Swiss banks’ crimes. Why won’t the UK?

Posted by: Nick Shaxson in: Thoughts

The United States has taken an aggressive approach to foreign and local banks that have helped its citizens evade tax. (OK, so they are a tax haven in their own right, but that’s another issue.) They took Swiss bankers and their clients, slung people in jail, put pressure on them, got more information about other banks, then widened their investigations, putting pressure all the way and bringing more and more criminal banks into the frame.

And I’m delighted to see this latest, from Reuters:

Credit Suisse will disclose names of U.S. clients

Credit Suisse AG, Switzerland’s second-largest bank, has begun notifying certain U.S. clients suspected of offshore tax evasion that it intends to turn over their names to the Internal Revenue Service, with the help of Swiss tax authorities.

But over here in the UK – and in Germany – we get none of this aggression. Instead, we get sweetheart deals with Swiss bankers – which simply will not work.

4 comments so far

Alien Edouard 11th November, 2011 12.36 pm

“Why won’t the UK”?

erh… because the UK is 10-15 times smaller than the US, and the Swiss will just laugh at you if you try… It is the mouse that roars syndrom.

There are only two jursidictions that can apply any leverage on Switzerland: the US and Germany.

Nick Shaxson 11th November, 2011 7.35 am

a) have you tried counting the relative size of the US and UK economies. As I’ve pointed out to you before, you are seriously out of kilter.
b) in the U.S. case, it is the justice system that has done the heavy lifting. The UK courts could do the same, with given to the UK on a plate. But it has instead chosen the sweetheart route. It’s not just about ‘leverage.’ and btw, your ‘germany can apply leverage’ point flatly contradicts everything you said earlier about germany and the eu.

Alien Edouard 11th November, 2011 11.43 am

Ok, so the UK economy is a little less minuscule than I thought. Instead of being the size of Texas, it is about the size of California. It is not a mouse that tries to roar, but a rabbit. The point remains the same however; the UK has very limited economic leverage over Switzerland.

Your post appears to incomplete. I suppose you meant to write that UK prosecutors had data about alleged tax evaders provided to them on a plate. You conveniently ignore that this data was obtained through theft and is therefore useless in a court unless corroborated, and Switzerland has clearly stated they would not provide assistance for this purpose. As far as I understand, the UK tax authorities are investigating the alleged evaders in the hope of discovering some other, admissible evidence. There is no sweetheart deal there.

There is no contradiction at all in what I have written. Germany has indeed leverage over Switzerland (and over Luxembourg, etc.), but that leverage is diluted when it acts through the EU. Germany has come to the conclusion that an agreement like Rubik is the best way of applying that leverage.

Nick Shaxson 11th November, 2011 8.54 am

i think you will find that the eu magnifies leverage in most cases, rather than dilutes it. You are still contradicting yourself. First you agree that the loopholes are so gaping that they will raise next to nothing, and then you say that rubik is a source of leverage. and on whistleblower data, you can in theory use it as a basis for TIEA requests. But instead of doing that, the UK signed this deal. And the deal will stop even that possibility.

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