Swiss diplomat Joerg Gasser responds to criticism of Swiss bank data-sharing with countries struggling with corruption scandals, in the second part of a three-part interview with finews.com.
Swiss banks have faced an uphill struggle for market access in Europe as Switzerland and the bloc battle over immigration and corporate taxes. Meanwhile, a landmark intergovernmental data-sharing agreement – which effectively buries banking secrecy in Switzerland – is set to begin within months.
Over coffee and chocolates in his Bern office overlooking the Aare river, Switzerland's highest finance diplomat Joerg Gasser previously told finews.com about supporting fintech in Asia and efforts to link up Swiss banking with the City of London outside the European Union.
In this, the second in a three-part interview with Gasser (read the first part here), he outlines a thaw in EU financial relations and responds to criticism that Swiss banks could endanger their clients by handing over confidential data to countries rife with corruption.
Joerg Gasser, Switzerland's talks with Europe over financial access had been at a standstill. With immigration sorted, have talks resumed?
The talks on regulatory issues and equivalency have resumed after they were put on hold due to the immigration vote. These talks are largely technical in nature. Other issues rely on what relationship the EU and Switzerland settle on.
On the data exchange, private banks have voiced concern about sending confidential client data to countries where it might be subverted for other purposes.
It’s a moral dilemma for certain, and one which I don’t wish to minimize. We need to look at how the automatic exchange of information (AEoI) figures into the entirety of our relationship to the countries we are agreeing it with.
Can you give me an example?
If we decide not to introduce AEoI with Brazil because we’re worried that clients’ safety could be jeopardized, it would probably mean that Swiss investors in Brazil aren’t as welcome anymore, and Brazil – a G20 country – would exert pressure on Switzerland through international bodies.
That’s not an easy equation.
It’s up to the government to decide, but every agreement will also be put before parliament to decide. This is a unique introduction of AEoI compared to our neighbors, who in the vast majority don’t need parliamentary approval.
Brazil is a good example in that Switzerland’s attorney general has been very active on several high-profile corruption cases like Petrobras and Odebrecht.
Yes, but there is a distinction between various agencies. Brazil’s tax office isn’t part of the corruption investigation.
I’m not accusing Brazil’s tax authority of corruption.
But that’s at the heart of it: the fundamental question of exchanging highly personal and confidential data with states who may not have the same interpretation of the rule of law that we do.
«Data-sharing isn't without risk»
I’m not saying it is without risk, but let’s look at the full picture. Because of our internal procedures we won’t be exchanging data with the 41 further countries that we have agreed to for another year.
«We'll be monitoring for any glitches»
That’s one year to see how AEoI works in practice. If there are problems or glitches, the entire network is informed. We’ll be monitoring that first year very closely to see how the exchange works in practice.
You’ve been in office for nearly a year now yourself. How is your job different from that of your two predecessors?
I’m not as involved in pressing negotiations as my predecessors were. We have been so focused in recent years on the EU and on the U.S. tax legacy issue for the banks.
«With problems almost resolved, we need to widen our network»
The problems are largely resolved. It’s now part of our strategy to widen our network of official contacts in Latin America, the Middle East and Asia and to promote our financial centre more effectively.
Joerg Gasser began his career in 1996 at the International Committee of the Red Cross, where he worked as a negotiator, including in Pakistan and Iraq. The 47-year-old economist later became a division head for the international aid organization in Geneva. In 2008, he joined the Swiss government as an economist in its justice and police arm. He moved to the finance department six years ago as a secretary general.
Gasser, who studied macroeconomics and international relations in Zurich, was appointed State Secretary for International Finance Matters last July. He is the third person to serve as Switzerland's highest finance diplomat since the agency was set up seven years ago – and by far the youngest.
