Swiss govt proposes tougher bank checks
(9 June 2015 – Switzerland) Swiss banks will be expected to tighten their risk-based checks to avoid accepting untaxed assets.
Switzerland’s government has taken several steps to change the perception it is a haven for untaxed assets.
It has negotiated a pact allowing the automatic exchange of tax information of bank-account holders with the European Union.
For clients in countries that are not covered by automatic exchange information agreements, banks will need to conduct risk-based checks, the government said on 5 June.
“As part of the measures to achieve a tax-compliant financial center, the new due-diligence requirements should prevent the inflow of untaxed assets to Switzerland,” the government said in a statement.
“The details of the risk-based assessment will be established by the supervisory authorities and the recognised self-regulatory organisation.”
The proposal, which has not yet been voted on in parliament, would restrict banks from accepting new clients if they suspect their money is untaxed.
If a fresh deposit by an existing client raises red flags, the bank has to check the clients entire assets and if there are doubts the bank must request the client to demonstrate their tax compliance.
If the client cannot do so and or hasn’t entered into the process of regularizing the money, the bank must dissolve the business relationship, the government said.
“The business relationship will not be terminated in cases where it is not possible for the client to provide proof of tax compliance or to regularize the tax situation without running the risk of unreasonable adverse effects,” it also said.
Sindy Schmiegel, a spokeswoman for the Swiss Bankers Association, told Bloomberg the change was inopportune.
“In practice banks are already undertaking risk-based checks for foreign clients,” she said.
“The current point in time is very awkward because much tax-related regulation now needs to be implemented. Moreover, it’s unclear how the proposal will be put into force.”
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