Self-declarations may be required but won’t be obligatory
BERN, SWITZERLAND – The Swiss Federal Council signalled Friday afternoon that it wants clear rules that will end acceptance by Swiss banks of untaxed assets. The catch-22 facing those who will draw up the new rules is how to tell banks they can ask for auto-declarations but that which will not be mandatory.
“The Swiss Bankers Association quickly said in reaction to the council’s statement, that it agrees with the main principles, but noting that: “The proposals put forward by the Swiss Federal Council regarding the instrument of self-declaration have not yet been described in detail. It is positive that the Federal Council does not include a systematic self-declaration in its proposals. The SBA has clearly rejected obligatory systematic self-declaration since a long time, as this places the clients under general suspicion and is neither practicable, credible nor can it be established internationally. No bank in the world can be made responsible for the tax-compliance of its clients. The SBA welcomes the creation of a task force in terms of a general overview. It is important to the SBA that already existing considerations will be taken into account and that work starts very swiftly.”
The council says, in its statement that it:
“is stepping up its efforts to combat abuses in the area of money laundering and taxation. With the planned implementation of the revised recommendations of the Financial Action Task Force (FATF), serious tax offences will be qualified as predicate offences for money laundering in future. In the event that they suspect money laundering, financial intermediaries should also report these cases to the Money Laundering Reporting Office Switzerland.
“At its meeting today, the Federal Council also decided with this bill, which incorporates other laws such as tax laws and the Code of Obligations (legislation on companies limited by shares) along with the Anti-Money Laundering Act, to regulate at the same time the principles of enhanced due diligence requirements to prevent the acceptance of untaxed assets. The extent of the examination depends on the risk posed by the contracting party, which is similar to the due diligence requirements for combating money laundering and terrorist financing. Financial intermediaries will be obliged to issue self-regulation provisions in compliance with specific legal parameters which are to be recognised and monitored by the supervisory authority. Recognised self-regulation provisions are equivalent to legal provisions in terms of their impact. In the absence of any self-regulation, the supervisory authority will be empowered to issue corresponding regulations.”
A key feature will be that banks “will be able to request a self-declaration from clients on the fulfilment of their tax obligations. The self-declaration will serve as an indicator of the tax-compliant conduct of the client. However, there is no self-declaration obligation.”