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PARIS, Apr 19 2012 (IPS) - Swiss banks are facing prosecution in several European countries, accused of complicity in tax evasion and money laundering schemes, especially with French, German, and wealthy Greek citizens.
In France, the publication last March of a book revealing massive tax evasion by French citizens with the help of a renowned Swiss bank forced local judicial authorities to launch an inquiry into the practices of the financial institution.
On Apr. 16, a spokesperson of the French Public Prosecutor’s office confirmed to IPS that it had launched an investigation against the Paris agency of the Union Bank of Switzerland (UBS), under the charges of money laundering and tax evasion, among others.
The book by journalist Antoine Peillon, entitled ‘Ces 600 milliards qui manquent à la France – Enquête au cœur de l’évasion fiscale’ (‘Those 600 billion which France is missing – Inquiry into the heart of tax evasion’), reveals the methods the bank has allegedly used for years to encourage wealthy French citizens, from business people and high-ranking politicians to sports celebrities and artists, to evade taxes.
According to Peillon, who supports his claims with classified research conducted by the French secret services, interviews with former bank employees, and the bank’s own internal documents, UBS deploys a large clandestine team operating in France, with the sole task of wooing rich French citizens to use their services in attempts at tax evasion.
“Until last January, UBS had 120 clandestine operators in France,” Peillon told IPS. “Each of them used the so-called handbook of private banking, a veritable manual of tax evasion. Each of these operators keeps a hidden accounting system, colloquially called ‘carnet du lait’, French for ‘milk book’.”
Peillon estimates that French citizens and private enterprises held secret bank accounts at the UBS worth some 600 billion euros. “Since the year 2000, France has lost some 85 million euros in taxes per year as a result of these accounts.”
The conflict with France is but one of several legal disputes that have brought Swiss banks into confrontation with foreign justice systems.
Last March, Swiss justice authorities issued an international arrest warrant for three high ranking German fiscal officials, under the accusation of “complicity in economic espionage” and “violation of bank secrecy.”
On Mar. 20, German prosecution authorities received the official notification, in which Swiss justices demanded the arrest of the three German officials.
According to the German government, however, the three fiscal officials did not commit any crime – quite the opposite: they were pivotal in prosecuting thousands of German citizens guilty of tax evasion.
To prove their case, the three officials acquired, in 2010, an electronic data storage device containing information of thousands of secret bank accounts held by German citizens in Switzerland, to evade taxes.
With that data, the German finance ministry was able to prosecute and sanction more than 6,000 tax evaders, obtaining an additional tax income worth some 300 million euros.
Reacting to the Swiss arrest warrant, German finance minister Wolfgang Schaeuble said that the three German officials had done “an excellent job.”
German opposition leader Sigmar Gabriel, president of the Social Democratic Party, even urged the government in Berlin to launch an international arrest warrant against Swiss private bank officials, for complicity with money laundering and tax evasion.
If “private banks (are) accomplices of tax evasion and money laundering they should be prosecuted by German justice, even if the banks have their headquarters abroad, and the crimes mentioned are also committed abroad,” Gabriel said.
Other European governments have recently complained that Swiss banks have been collaborating with wealthy citizens to evade taxes.
According to a list released by the Greek government last January, more than 4,000 Greek citizens evade taxes worth 14,877 billion euros, representing seven percent of the national economic activity, or 60 percent of the total public deficit of 2011.
The list, which Greek financial minister Evangelos Venizelos dubbed the “list of shame“, included Greek business leaders, artists, and athletes. It is conventional wisdom that Greek tax evaders are using tax havens in Switzerland, but also in Luxembourg, Liechtenstein, and Monaco.
Similar data is available in Italy, Spain, Portugal, and elsewhere in Europe.
Forced by the sovereign debt crisis to improve their own tax efficiency, European governments and the European Union have created new debates on tax evasion.
In late March, a workshop entitled “Tax and financial havens – a threat to the EU’s internal market”, took place in the Belgian capital Brussels.
The event was organised by the European Economic and Social Committee (EESC), an official advisory body to the EU. In his opening speech, the president of the EESC section on internal markets, Bryan Cassidy, plainly singled out Switzerland, Luxembourg and Britain as notorious onshore fiscal havens within Europe.
Cassidy also stressed that “money laundering and tax havens are closely connected.”
The legal conflicts with Switzerland on tax evasion also highlight the futility of the decades-long international fight against tax evasion, mostly within the framework of the Organisation for Economic Cooperation and Development (OECD) and its associated Financial Action Task Force (FATF).
Peillon told IPS that despite the financial crisis of 2007, “tax havens in Europe are doing as (well) as ever, even if the so-called black and grey lists of the OECD and the FATF pretend otherwise.”
According to the OECD and the FATF, as of Feb. 2012, only two countries worldwide do not fulfil the “strategic measures against money laundering and finance for terrorism standards” (AML/CFT) established by both groups: Iran and the Democratic People’s Republic of Korea.
Additionally, the FATF-OECD list 15 other “jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies.”
These 15 jurisdictions are countries and territories in Latin America, Africa, and Asia, but do not include a single one of the most notorious tax havens in the Caribbean, such as the Cayman Islands, or in OECD states in North America, such the U.S. state of Delaware, or Europe.
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