Swiss bank secrets begin to emerge
Echegaray says account holders can take part in country’s fiscal amnesty
If Argentines who hold 4,040 undeclared bank accounts in Switzerland don’t normalize their fiscal status and pay their debts, the AFIP tax bureau will file a complaint before the Office of Economic Crime and Money-Laundering (PROCELAC) requesting it investigates them, AFIP head Ricardo Echegaray said yesterday.
Even though AFIP cannot divulge data of the undeclared bank accounts in the Swiss branch of HSBC, Echegaray said yesterday there are some “resounding cases” and gave two examples: one account with US$1.3 billion, “the amount the ‘vulture funds’ are asking us for,” and another one held by the former owners of Banco Mayo.
“The investigation is now at AFIP and they have an opportunity to normalize their situation. But later it will be at PROCELAC. I’ve already sent a letter to PROCELAC’s head,” the official said, replying to a question by the Herald at a press conference yesterday.
“The Argentine law allows them to pay the taxes they owe and many of them could even take part in the fiscal amnesty,” he added.
Echegaray last month received an encrypted CD from the French government containing information on 4,040 undeclared bank accounts of Argentine origin. The original source of information is whistleblower Hervé Falciani, who worked as an IT engineer at the HSBC branch for seven years before deciding to leak what he saw as systematic tax evasion.
“We have a lot of information about the bank account holders such as their name, address, phone number, e-mail address and all the transactions they made. Once we finish analyzing the information and see who took part in the fiscal amnesty and normalized their situation, we will give the information to PROCELAC,” Echegaray said. “The data is valid and the statute of limitations will not render it useless.”
Echegaray invited them to participate in the fiscal amnesty to legalize undeclared cash via the BAADE energy bond, destined to investments in the energy sector, and the Cedin certificate, a certificate of deposit which can be used for real estate transactions. Both instruments will be valid until the end of the year.
Asked about bank holders’ specifications, the AFIP tax bureau chief answered: “The ones who took the money of the savers of Banco Mayo are on the list,” Echegaray said, probably referring to the former head of the bank Rubén Ezra Beraja, who spent two years in prison and was then released for fraudulent manoeuvres regarding the bankruptcy of Banco Mayo in 1998.
Beraja was accused of organizing a conspiracy to deceive savers who invested in the bank as well as the Argentine state, which gave him US$298 million to compensate savers. Beraja supposedly used the money to benefit his friends and family in ways which led to the bankruptcy of the bank. For example, he purchased a timeshare in Punta del Este from a company Icatur headed by his brother-in-law’s brother.
“We obtained this information through the French government thanks to the double taxation treaty we signed with them. I was accused of holding meetings with former bankers so AFIP could increase its tax collection. But I will keep on having these meetings so as to access more information,” Echegaray said, referring to his meeting with Falciani.
Echegaray originally met with whistleblower Falciani earlier this year during an official visit to Lyon. Falciani had reportedly contacted the Argentine authorities to talk about the list and offered to give the information but the government instead chose to receive it through its so-called double taxation treaty with France in order to give the data more validity when used in court.
The data obtained thanks to Falciani’s list could be widened soon as Echegaray has already held a meeting with former heads of the Swiss bank UBS, who offered him information about undeclared bank accounts of Argentine origin. But as the data could not be considered evidence in court, the tax bureau decided to wait and first create a mechanism so as to be able to receive it.
“We met with them and they offered us information. We don’t have the framework or the protocol to have access to it officially but we are working on that,” Echegaray said.
“The Swiss bank gave information to the Internal Revenue Service (IRS) of the United States and the government used it so we will continue talking with the bankers.”
An automatic exchange
Switzerland’s decision last week to move forward with implementing an automatic exchange of tax information will lead to the country sharing data with Argentina on those conditions as from 2017, Echegaray said when asked by the Herald.
“Argentina will have an automatic exchange of tax information with Switzerland as from 2017,” Echegaray said.
“I imagine Congress in both countries will ratify the agreement soon enough.”
Both countries signed a pact in March which exempts companies from double taxation in Argentina and in Switzerland and establishes avenues for the sharing of tax information between both countries. The deal says the exchange won’t be automatic and can only be asked for when a tax investigation with sufficient proof has been launched by a court.
As for now Switzerland has agreed to implement this pact instead of an automatic exchange worldwide, Argentina will try to change the characteristics of the agreement, which doesn’t force either of the signatory countries to implement an automatic information exchange but at the same time doesn’t forbid it.
According to the agreement, to which the Herald had access, both countries agreed to a round of consultations before an automatic exchange of information is implemented. The legal characteristics of the exchange and its contents would be discussed in such meetings. Tax experts disagree with Echegaray and say the earliest it could happen would be 2018.