Greece seeks Swiss co-operation in hunt for tax cheats

09/04/2014

Athens is asking for assistance to identify Greek citizens who are using Switzerland as a tax haven.

By Andy Dabilis for Southeast European Times in Athens -- 09/04/14

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The Greek government wants to inspect secret foreign bank accounts of tax evaders such as those in the HSBC bank. [AFP]

Greece is asking Swiss authorities to lift bank secrecy practices and allow its investigators to reveal the names and details of bank accounts held by Greek citizens.

The request comes as Greece is already poring through a list of 2,059 Greeks who have put away 1.5 billion euros in the HSBC bank's Geneva branch.

IMF Managing Director Christine Lagarde passed the list to Greek officials in 2010 after a bank employee stole a computer disc containing details of account holders.

The finance ministry said tax evaders owe 63 billion euros, and recovering some of the money is a key demand by the EU-IMF-ECB Troika to put up 240 billion euros in bailouts.

The government last month was able to check only 72 foreign bank accounts whose holders owe between 5,000 and 5 million euros in unpaid taxes.

It is common knowledge that many wealthy and influential people have secret bank accounts in Switzerland and in other tax-haven countries, said Antonis Klapsis, head of research at the Konstantinos Karamanlis Institute for Democracy in Athens.

"This is yet another step that shows the government's willingness to do what it takes to tackle the problem of tax evasion," Klapsis told SETimes.

Analysts said if Switzerland agrees, it will provide the key to obtaining information on bank accounts holders in other tax-haven countries, including Luxembourg.

"If this is achieved, it will be a gesture showing the government wants to move toward a catharsis," George Tzogopoulos, a research fellow at the Hellenic Foundation for European and Foreign Policy in Athens, told SETimes.

But Tzogopoulos said he is not optimistic because of a lack of political will and the Swiss bankers' position to protect their clients.

Switzerland has entered into tax withholding agreements with the UK and Austria. A similar agreement with Germany failed because of parliamentary opposition in Berlin. Greek citizens hide 34 billion euros in Swiss bank accounts, according to a 2009 report by the Geneva-based brokerage firm Helvea.

Switzerland agreed to meet international standards to avoid being blacklisted as a tax haven by the Organisation for Economic Co-operation and Development (OECD) in 2009, but Swiss banks in most cases are not giving up the practice of banking secrecy.

Luxembourg took a stand against the EU attempt to approve legislation requiring automatic exchange of data on bank deposits that will allow governments to identify and chase tax evaders.

Luxembourg has insisted it will support the law only if non-EU banking hubs within Europe, particularly Switzerland, sign up.

EU officials said tax fraud and companies' cross-border tax avoidance schemes cost Union governments an estimated 1 trillion euros a year.

After Luxembourg voted down the legislation that required unanimous approval from all 28 countries, EU antitrust authorities ordered officials to turn over information on its tax and banking practices.

Luxembourg did not answer two previous requests, invoking fiscal secrecy laws, but the European Commission said it may sue in the European Court of Justice if Luxembourg's non-compliance continues.

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At present, the Greek government is focusing only on bank accounts in Switzerland.

"It is not just a matter of money, but of credibility that the government is doing something to fight corruption and tax evasion. It is more political," Charalambos Tsardanidis, director of the Institute for International Economic Relations in Athens, told SETimes.

Tsardanidis cautioned, however, even if Switzerland and other countries agree to the Greek government's request, it will still take years to obtain the owed money because Greek courts are backlogged up to 10 years in tax cases.

What else should the Greek government do to obtain money owed by tax cheats? Share your opinion in the comments space.

This content was commissioned for SETimes.com.
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