Analysts laud end of Swiss banks privacy

Analysts in China lauded Switzerland's pledge to share the details of foreign bank accounts and believed it would gravely help the country's already tough anti-corruption drive.

Switzerland agreed to sign a new global standard on automatic information exchange in tax matters on Tuesday at a ministerial meeting in Paris.

Under the pledge signed by 47 countries, including China, financial information will be shared on an annual basis between governments, according to the Organization for Economic Co-operation and Development (OECD).

The shared information will include bank balances, dividends, interest income and sales proceeds used to calculate capital gains tax.

"It means that governments can really assess the tax owed by people who thought they could hide in other jurisdictions," Pascal Saint-Amans, tax director at the OECD, told Reuters.

While making a significant breakthrough in the global crackdown on tax evasion, this move is also believed to be a sword to fight corruption by strengthening international cooperation.

Swiss banks' centuries-old commitment to protecting the privacy of clients has been seen as a perfect shelter for corrupt officials who tried to hide their fortunes, said Ni Xing, a professor with the Center for Anti-Corruption Studies of Sun Yat-sen University.

Switzerland is the world's biggest offshore financial center with $2.2 trillion of offshore assets, Financial Times reported on Tuesday.

Several reports have estimated that assets transferred overseas by corrupt Chinese officials have exceeded $50 billion, but no official figures have ever been published.

"Assets recovery is a major obstacle in the anti-corruption drive," Ni said.

Some 150 developing countries, led by China, have been the source of flows of tainted money totaling $5.9 trillion for over 10 years up to 2010, according to a 2012 report by the Global Financial Integrity, a research and advocacy group in Washington DC.

Switzerland's banking secrecy has posed difficulties in evidence collection when dealing with these cases and the breakthrough will bring international cooperation to a new level, experts believed.

Ni believed this move can not only help recover embezzled money transferred overseas, but also pose as a deterrent to officials with such intention.

Although the signatories did not officially commit to a specific deadline, a group of early adopters is aiming to have exchange of information up and running by 2017 using tax data collected from the end of 2015, Reuters reported.

The OECD will deliver a detailed commentary on the new standard, as well as technical solutions to implement the actual information exchanges, during a meeting of G20 finance ministers in September, the organization said on its website.

G20 governments have mandated the OECD-hosted Global Forum on Transparency and Exchange of Information for Tax Purposes to monitor and review implementation of the standard, it added.