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EU envious of US Swiss secrecy success

The EU has been watching the success of the US attacks on Swiss banking secrecy with envy and hopes now to make progress on its own tax deal with Switzerland.

Published: 2 February 2012 12:40 CET

EU envious of US Swiss secrecy success

Päivi Tiittanen (File)

Inspired by the Americans’ achievement, the Danish EU Presidency has said it is putting an EU tax agreement with Switzerland back on the agenda when EU finance ministers meet on February 21st, newspaper Tages Anzeiger reports.

The EU Commission has long wanted to close taxation loopholes with Switzerland and enter into new bilateral agreements for mutual assistance.

“Switzerland’s European partners should be treated as well as or better than the United States,” the EU Danish Presidency said.

A deal with Switzerland at the European level could end up replacing separate Swiss bilateral agreements currently under negotiation with Germany and the United Kingdom. The Swiss announcement of the British and German negotiations divided opinion in Europe over how to tackle Switzerland’s stance on banking secrecy.

But many in Germany have not been pleased with the deal struck with Switzerland, believing that its terms do not go far enough.

“We naturally ask ourselves why the United States achieves more with its threats than we do,” Lothar Binding, German Social Democrat and finance expert told Tages Anzeiger. “We feel badly treated by Switzerland,” he said.

See also:

Credit Suisse hands US millions of emails: report

Oldest Swiss bank sold amid US tax dispute

US offers Switzerland tax row deal: report

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Why does Switzerland have to comply with European court rulings?

In a landmark ruling handed down on April 9th, the European Court of Human Rights (ECHR) in Strasbourg sided with a group of Swiss pensioners who ‘sued’ the country for not doing enough to mitigate the effects of global warming.

The ECHR ruled that Switzerland had violated Article 8 of the European Convention on Human Rights, which guarantees the “right to respect for private and family life,” and ordered the government to pay the complainants a fine of €80,000 (78,555 francs).

READ ALSO: Who are Switzerland’s victorious climate ‘Elders’?

While environmental groups and a number of political parties welcomed the verdict, questions also arose about why Switzerland, which is not a member of the EU, must comply with the decision handed down by the Council of Europe’s court.

This fact was not lost on the populist, anti-EU Swiss People’s Party (SVP).

One of its MPs, Jean-Luc Addor, questioned not only the court’s judgment, but also the fact that foreign judges have ‘meddled’ in Swiss matters.

“What is the legitimacy of the ECHR to pronounce such a ‘condemnation’?,” he asked.” Is it now going to send the European army to Switzerland?”

So why is Switzerland obligated to conform to the ECHR’s judgment?

In 1974, the country, though neutral, signed the European Convention on Human Rights.

As the European court was established expressly to monitor the parties’ compliance with the provisions enshrined in the Convention, Switzerland must heed its judgements. (The ECHR hears only matters related to human rights. It does not handle any criminal cases).

To ensure that rulings are just and impartial, the ECHR’s judges come from the 46 countries that ratified the Convention.

Switzerland is represented by Andreas Zünd, who has served on the ECHR since January 2021.

How do Swiss cases end up in front of ECHR judges?

Switzerland has different court levels: district, cantonal, and federal.

Complainants first file their cases in the district court. If they are not happy with the verdict, they can appeal it within 30 days, at which point the case will go to the higher judicial level, that is, the cantonal court.

The next step up the judicial ladder is the Federal Supreme court, the highest judicial authority in Switzerland.

Headquartered in Lausanne, it is the final instance on all appeals against decisions of the cantonal courts.

But though this final judgment can’t be appealed in Switzerland, the case — if it relates to rights outlined in the Convention — can be taken to the ECHR.

READ ALSO: What you should know about Switzerland’s courts

What ‘Swiss cases’ have been judged by the European court?

The climate activists’ case is the latest of dozens of rulings involving complaints from Switzerland.

Some of the other successful ones involved a widower whose pension benefits were denied by a Swiss court; a Romanian woman fined for beginning in Geneva; and a Sudanese man who won his appeal against deportation from Switzerland.

You can see all the ECHR rulings for Switzerland (in German or French) for the last 45 years here.

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