Crackdown may loom on Swiss accounts

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Crackdown may loom on Swiss accounts

In what could lead to a crackdown on offshore tax evasion, Korea and Switzerland will discuss exchanging financial information - including details about Swiss bank accounts secretly held by Koreans, according to a government official.

At a meeting scheduled for July, the countries are expected to talk about adding a clause to a bilateral 1981 tax treaty that will allow each country greater access to information on bank accounts held in the other nation.

If enacted, the clause would allow both countries to track suspected tax dodgers.

“Switzerland had been reluctant to discuss the issue, but it recently suggested that the two sides meet in Switzerland in July,” said a Strategy and Finance Ministry official who wished to remain unanimous. “Working-level officials will iron out the details prior to the meeting and finalize the discussion in July.”

The government anticipates that if the two sides agree, they will be able to exchange information beginning next year.

Wealthy Koreans have been rumored to hide fortunes in Swiss bank accounts, but verifying the stories has been impossible because the Swiss would not release any financial information.

Should the treaty be modified, the Korean government will be able to examine the records of Swiss accounts maintained by Koreans, and levy taxes accordingly.

Switzerland has maintained notoriously strict banking secrecy laws for decades, even refusing to release the identities of Swiss bank account holders.

However, Switzerland has bent to pressure from other developed countries, which threatened strong sanctions against tax-haven nations at the G-20 meetings in London last April.

Switzerland has since signed understandings with a dozen countries under which it agreed to provide information on secret accounts at several Swiss banks.

In August 2009, UBS, the biggest bank in Switzerland, agreed to hand over a list of 4,450 American tax-evasion suspects - and their account information - to the U.S. government.

Nearly 15,000 people subsequently admitted holding Swiss accounts to U.S. tax authorities.

By Limb Jae-un []
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