#1 Loopholes That Will Preserve Swiss Bank Secrecy

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No question that the Swiss will avoid blacklisting by changing the law in 2009 or 2010 to the minimum disclosure required. Of course, the loophole will be for all foreigners to form corporations [think panama]. I wudn’t write about it publicly or else BB will shut this loophole, but that is exactly what happened to get Monaco off the blacklist.

Some 50,000 “private” accounts became corporate or institutional a few years ago when the disclosure/withholding laws went into effect.

The panel is likely to look at whether Switzerland’s banks should change their rules on client confidentiality. Swiss law defines tax evasion as a civil, rather than a criminal offense. That protects depositors from scrutiny, because the country’s banking rules say that bank data can be provided to foreign governments only in criminal cases.

Swiss prosecutors can, by contrast, provide international legal assistance in tax fraud cases, because fraud is listed in the nation’s criminal code.

It’s this distinction between tax evasion and tax fraud that the expert committee set up Friday is tasked to review. Any decisions prompted by the panel, whose deliberations will be confidential, would be taken made by the Swiss cabinet.

Swiss banks manage about 670 billion Swiss francs (about $570 billion) on behalf of foreign private investors, according to Swiss National Bank data. That’s just under 18% of the 3800 billion francs in assets managed by Swiss banks in total. Swiss banks hold about 1.4 trillion francs=2 0in assets from foreign institutional investors and about 133 billion francs from foreign corporations.

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