Switzerland lifts secrecy wall, to share bank account info with other countries

The government of Switzerland has approved a revision of its tax laws, allowing the sharing of bank accounts and other details with foreign countries, including India, even without prior intimation to the persons concerned, marking an end to its archaic banking secrecy laws.

The Federal Council of Switzerland approved a partial revision of the Tax Administrative Assistance Act and adopted a resolution that would fulfil the OECD disclosure standard, following a consultation process conducted from 14 August to 18 September 2013.

The Swiss government said it would clarify details regarding the deferred notification of affected persons, which was received positively by the majority.

Switzerland will thereby fulfil the applicable international standard.

Under the existing law, taxpayers had to be notified without exception before data concerning them was transmitted to the requesting state.

The move comes as a welcome relief to foreign authorities, including from India, who have been trying to get information about suspected illicit funds parked in Swiss banks.

The Swiss decision comes a day after the country inked the OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The signing of the pact allows automatic exchange of information and mutual administrative assistance in tax matters with overseas authorities.

Under the existing law, taxpayers had to be notified without exception before data concerning them was transmitted to the requesting state.

''Based on the results of the consultation procedure, the Federal Council has specified in its draft that deferred notification of taxpayers is possible only in exceptional cases,'' the Swiss government said.

Besides, the country which is putting forward the request would have to substantiate the same.

Noting that group requests are already possible under the existing law, the Federal Council said that in order to improve efficiency, the revision provides for a notification procedure that is tailored to group requests.

The Federal Council said the revision of the Tax Administrative Assistance Act was made necessary by international developments in the area of taxation.

During the summit in September 2013, the G20 members once again urged all jurisdictions to implement the Global Forum's recommendations without delay. This appeal was addressed particularly to those states which, like Switzerland, have not yet been admitted to the second phase of the peer review.

Moreover, the Global Forum will commence the final grading of the first 50 states, which have completed both phases of the peer review this autumn.

''These final grades will have a significant impact internationally. So long as Switzerland has not passed the first two phases of the peer review, the pressure will continue to increase, bringing with it the growing risk of black lists and other bilateral and multilateral sanctions.'' The Swiss government said.