Swiss Head For OECD Meeting As Tax Haven Issue Refuses To Go Away

Osmond Plummer

28 April 2009

Having missed the October’s meeting of the Organisation for Economic Co-operation and Development in Paris, the Swiss are more eager to be there next time to avoid criticism.

They have finally been invited to the OECD meeting in Berlin in June where tax havens will again be up for discussion. Various media reports cite a spokesperson from the German finance ministry saying that the invitation was sent last Friday. Initially, the lack of Swiss participation in October meant that an invitation was not forthcoming for the next event.

Many observers have speculated as to why the Swiss government has been reluctant get diplomatically involved in these international discussions – a recent invitation from the EU to renegotiate the EU-Swiss anti-fraud agreement was rejected as “unnecessary”.

One of the principal elements of the founding agreements at the heart of the direct democracy that is the Swiss confederation is that no foreign laws shall have effect in the country. This is at the heart of the reluctance of Swiss governments to become involved with supranational organisations like the United Nations, the European Union or quasi-government bodies such as the OECD.

The underlying principle has been to wait for internal disagreement within those bodies to derail any suggested changes. For now, the government is relying on bilateral negotiations with individual states on the basis of double taxation treaties.

But life is changing even in Switzerland and the neighbours are restless. Peter Steinbrűck, the German Finance minister, is applying pressure and is not prepared to wait forever. “Certainly not four or five years as I hear in your country,” he told SonntagsBlick in a recent interview. “We will fix a time limit. If there are no tangible results Germany will maintain the pressure.”

Whether recent developments will create any lasting change in the way that the Swiss government conducts its diplomatic business remains to be seen, but it would appear that the pressure for swift action is not going away any time soon.