Swiss banker: era of banking secrecy is officially over
A leading Swiss banker told his Lebanese counterparts that the days of banking secrecy are over, urging the lenders to prepare their clients for this inevitable outcome. “The banks which attracted tax evaders can no longer continue in this pattern because the era of banking secrecy is over and an era of transparency has begun,” Jacque de Saussure, chairman of Banque Pictet & Cie, told a group of Lebanese bankers during a lecture on the Future of Swiss Banking at the Association of Banks in Lebanon (ABL), reports the Daily Star.
Lebanon is one of the few countries in the world with a banking secrecy law.
Lebanon’s Central Bank Governor Riad Salameh has fiercely defended banking secrecy despite mounting U.S. pressure to disclose the accounts of American citizens in Lebanese banks.
In July 2014, Lebanon began complying with the Foreign Account Tax Compliance Act (FATCA), a United States federal law that requires US citizens who live outside the United States to report their financial accounts held overseas, and requires foreign financial institutions to report to the Internal Revenue Service about their American clients.
To combat tax evasion, the European Union and other developed countries are also expected to ask for the full disclosure of the bank accounts of all their citizens in every part of the world.
De Saussure advised the bankers to pursue the lifting of banking secrecy in a gradual and smooth manner.
“This step should be done in a smooth manner and move from the banking secrecy culture to the transparency culture, especially in countries that fundamentally depend on this law. To achieve this purpose, banks need to organize training sessions for their employees and to prepare the clients for this new trend,” the Swiss banker said.
After giving a brief history of Swiss banks and banking secrecy in his country, de Saussure said Swiss banks have benefited from the flow of funds and the relative ease of opening accounts offshore.
But de Saussure noted that US authorities became more alert following the Swiss bank UBS scandal in 2009.
“Following this scandal, the US authorities issued a tax legislation better known as FATCA. Most countries around the world are expected to make similar moves, especially the European Union and Australia,” he added.
De Saussure stressed that the fight against tax evasion is as serious as the fight against money laundering.
He urged Lebanese bankers to benefit from the Swiss experience.
Some bankers, who spoke on condition of anonymity, said they have rejected a number of requests by Lebanese-American citizens to open accounts in millions of dollars.
They added that banks are not willing to take any risk by accepting accounts from tax-dodgers.
Most Lebanese bankers admit that other countries are likely follow in the path of the United States in terms of tax disclosure.
However, they emphasize that banks are ready to deal with any law passed by the Lebanese Parliament in the future.
ABL has recently called on Parliament to ratify three draft laws to combat money laundering that the Cabinet approved three years ago.
The first draft law enables the introduction of amendments to anti-money laundering Law 318, while the second regulates the transfer of funds across borders and the third relates to the exchange of tax information.
ABL has also called for approving Lebanon’s adherence to the United Nations’ 1999 International Convention for the Suppression of the Financing of Terrorism.
