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A closer look at the crackdown on banks that help the rich avoid taxes.
[Editor's note: This was published in GlobalPost Passport. To read the full story, join Passport.]
The assault on Switzerland’s cherished banking secrecy began as a perfect storm of pressure from the world’s biggest economies.
For months, Germany’s finance minister Peer Steinbrueck has been on a crusade to overturn Switzerland’s status as a tax haven, arguing that Germany loses billions of Euros in unpaid taxes on money deposited in foreign bank accounts. Steinbrueck threatened his neighbor with “the whip,” and once compared the Swiss to “Wild West Indians” cowering under the influence of the financial industry’s cavalry.
Then, this February UBS bank was forced to reveal some 225 presumed tax evaders and to pay $780 million fine after a U.S. Internal Revenue Service investigation uncovered the bank’s elaborate schemes for helping U.S. clients stash money in secret Swiss accounts.
Finally, at the April G20 meeting in London, finance ministers — saddled with crisis-driven deficits — threatened to compile a black list of uncooperative tax havens unless countries agreed to abide by the OECD’s banking transparency standards.
The list would include Austria, Liechtenstein, and Singapore. One of the biggest targets would be Switzerland, which manages 27 percent of the world’s offshore wealth, according to an estimate by the Boston Consulting Group.
It was at that point that the wealthy alpine nation balked.
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