The European Union and Switzerland signed a bilateral agreement on the automatic exchange of financial information on Wednesday morning.
According to the Neue Zürcher Zeitung (NZZ), a major Swiss newspaper, the agreement commits both parties to collect information on banking accounts starting in 2017 and exchanging this data from 2018.
This agreement would entail a new limitation on legendary Swiss banking secrecy, as EU states will now automatically receive detailed information about any Swiss banking account owned by an EU citizen. This information can presently only be accessed upon request.
Pierre Moscovici, EU Commissioner for Economic and Financial Affairs and one of the signatories of the agreement, spoke of “a new era of tax transparency and cooperation between the EU and Switzerland”, according to a press release by the European Commission.
“It is another blow against tax evaders, and another leap towards fairer taxation in Europe,” he added.
The other signatories of the treaty were Jānis Reirs, the Latvian Minister of Finance representing the EU Council Presidency, and Jacques de Watteville, Swiss Secretary of State for international financial affairs.
The accomplishment of a lengthy process
The agreement would bring Switzerland further in line with the global OECD standard for the automatic exchange of information elaborated in July last year.
It is thus a product of a lengthy process of negotiations with the EU and the United States, described by the NZZ as “the long farewell of banking secrecy.”
The exchange of information with the EU upon request was accepted by Switzerland in March 2009, a move considered as the first major blow against Swiss banking secrecy.
A further blow came in December 2012, when an agreement was signed with the United States on terms similar to those agreed upon in the current EU agreement.
Pressure from the US, along with the pressure from the OECD and its new global standard, were the key factors in making this new agreement with the EU possible, the NZZ claims.
The optional referendum, a possible obstacle
There are still a few obstructions remaining for the treaty to be enforced: a vote in the Swiss Parliament and an optional referendum. The latter in particular could be a problem, as Swiss lawyer Paolo Bernasconi told la Repubblica: “There is a risk [of failure], no doubt about it.”
“The consequences [of a “no”] would be very severe, as we would find ourselves once again on the black list of the OSCE, that is, on the list of fiscally uncooperative countries, with catastrophic repercussions for our financial market,” Bernasconi added.
The Swiss electorate has proven itself skeptical of the EU in the past, voting in favor of restricting “mass immigration” in a referendum in February 2014, thus challenging Switzerland’s adherence to bilateral EU treaties.
There is thus a fear that many will see this treaty as another Swiss concession to the EU. Pierre Rusconi, federal MP for the nationalist and euro-sceptic Swiss People’s Party, the largest party in the Federal Assembly, voiced these concerns to la Repubblica: “It is as if the Maginot line just collapsed, now the EU is completing a creeping annexation of Switzerland”.
Pierre Rusconi added that he would vote against the agreement in the referendum, which will become mandatory if 50,000 signatures can be collected in its favor.