Switzerland is a peaceful, prosperous, and stable modern market economy with low unemployment, a highly skilled labor force, and a per capita GDP larger than that of the big Western European economies. The Swiss in recent years have brought their economic practices largely into conformity with the EU's to enhance their international competitiveness. Switzerland remains a safe haven for investors, because it has maintained a degree of bank secrecy and has kept up the franc's long-term external value. Request more information about opening a Swiss bank account.
Swiss bank secrecy protects private banking information; the protections afforded under Swiss law are similar to confidentiality protections between doctors and patients or lawyers and their clients. The Swiss government views the right to privacy as a fundamental principle that should be protected by all democratic countries. While secrecy is protected, in practice all bank accounts are linked to an identified individual, and a prosecutor or judge may issue a "lifting order" in order to grant law enforcement access to information relevant to a criminal investigation.
Swiss law distinguishes between tax evasion and tax fraud. If any holdings are not declared to the taxation authorities, a natural or legal person commits tax evasion. Tax evasion is not considered an offence, but only a misdemeanour. It is assumed that failed declaration of one's assets is not sufficient evidence for criminal intent, as the chance of unintentional failure is too high. However, tax fraud is considered a criminal offence under Swiss law and prosecuted according to the Swiss Penal Code. A forged tax declaration, like the statement of significantly below-market valuation of real estate or the counterfeiting of bank statements, is such a criminal offence of tax fraud.
Pressure on Switzerland has been applied by several states and international organizations attempting to alter the Swiss privacy regime. The European Union, whose member countries geographically surround Switzerland, has complained about member states' nationals using Swiss banks to avoid taxation in their home countries. The EU has long sought a harmonized tax regime among its member states, although many Swiss banking officials (and, according to some polls, the public) are resisting any such changes.
Since July 1, 2005, Switzerland has charged a withholding tax on all interest earned in the personal Swiss accounts of European Union residents.
In 2001 and 2002, an amnesty was offered by the government of Italy in which taxes and penalties on repatriated funds were limited on funds repatriated from Switzerland; 30 to 35 billion euro worth of deposits were returned to Italy. In 2003, a similar amnesty was approved by the government of Germany.
In January of 2003, the United States Department of the Treasury announced a new information-sharing agreement under the already extant U.S.-Swiss Income Tax Convention; the agreement is intended to facilitate more effective tax information exchange between the two countries. Said a Treasury official, "This Mutual Agreement should improve our access to needed information" under the terms of the tax treaty.
There are several measures in place to counter money laundering. The Money Laundering Act sets forth requirements of account holders' identification, and requires reporting of any suspicious transactions to the Money Laundering Reporting Office.
According to the CIA World Factbook, Switzerland is "a major international financial center vulnerable to the layering and integration stages of money laundering; despite significant legislation and reporting requirements, secrecy rules persist and nonresidents are permitted to conduct business through offshore entities and various intermediaries..."However, Switzerland's cooperation in transnational financial issues has been praised by several major U.S. officials. A Federal Bureau of Investigation anti-terrorism official noted that Switzerland was one of several countries to participate in joint task forces targeting financing of Al-Qaeda terrorist cells; a former Assistant Secretary of the Treasury praised Swiss cooperation and the country's assistance in the finding and freezing of terrorist and Iraqi assets.
Numbered bank accounts
Some bank accounts are afforded an extra degree of privacy. Information concerning such accounts, known as numbered accounts, is restricted to senior bank officers, rather than being accessible to all the employees of a bank. However, the information required to open such an account is no different from that of an ordinary account; completely anonymous accounts are prohibited by law. Should a criminal investigation take place, law enforcement has access to information related to a numbered account in the same way it has access to information about any other account.
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