Global Financial Integrity

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GFI Recommends Continued Pursuit of Improved Information-Sharing

Monique Perry Danziger, +1 202 293 0740 ext. 222
Global Financial Integrity
Monique Perry Danziger, +1 202 293 0740 ext. 222

Organization Calls for International Cooperation Following Announcement in UBS Case

WASHINGTON, DC – As negotiations in the United States civil case against Swiss bank UBS continue today, Global Financial Integrity (GFI) urges Lawmakers to turn their attention to larger issues related to tax evasion and banking secrecy, including improvement of information-exchange protocols between Switzerland and the United States and increasing overall transparency in international finance as key next-steps in U.S.’ efforts to curtail tax evasion.

“The UBS case exposed shortcomings in the current diplomatic and legal protocols governing cooperation between the United States and Switzerland with respect to information-sharing and tax assessment and collection,” said GFI director, Raymond Baker. “Now that this contentious and convoluted matter is approaching its conclusion it is time to turn attention to the larger issue in need of addressing: improving the flawed rules of engagement for investigating tax dodgers and enforcing compliance with U.S. tax laws.”

GFI recommends the following measures as key next steps:

  • U.S.-Swiss Tax Treaty: In June an amendment to the U.S.-Swiss tax treaty was agreed to but not yet ratified.  Statements from U.S. and Swiss parties to the negotiations indicate that information exchange would still rely on exchange upon request and would require the U.S. to provide names of suspected tax evaders to obtain information on their undisclosed accounts.  The U.S should push for an automatic information-exchange provision for all types of income similar to that found in the European Union Savings Tax Directive.
  • The Stop Tax Haven Abuse Act: Introduced in March this legislation would deter the use of offshore secrecy jurisdictions for tax evasion through a combination of strengthened investigative capacity, legal presumptions, and stronger penalties.  President Obama has endorsed the bill which will continue to be the focus of Congressional attention.
  • Maintain International Pressure on Banking Secrecy: Governments around the world and multinational bodies such as the Group of 20 have stated intentions to seek improved information-sharing in tax collection matters.  The U.S. should support these efforts in upcoming forums including the September meeting of the Group of Twenty.

“The UBS case is a bellwether event,” said Mr. Baker.  “We can expect to see more of this in the future as nations increasingly seek to improve transparency and accountability in global finance.”