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TAX EVASION

Bern agrees to settle tax evasion dispute with US

The Swiss federal government has accepted a United States demand to settle a dispute over the alleged complicity of Swiss banks in tax evasion by Americans that will reportedly cost the banks billions of francs.

Bern agrees to settle tax evasion dispute with US
Finance Minister Eveline Widmer-Schlumpf. Photo: Federal Chancellery

 "This is both a good and a practical solution," Finance Minister Eveline Widmer-Schlumpf told reporters on Wednesday after a cabinet meeting approved the draft accord.

She declined to give details of the sum that the banks will have to pay US revenue authorities in order to win legal closure, though Swiss media have reported that the overall figure could hit 10 billion francs ($10.3 billion).
   
"If a bank has done a lot of business involving undeclared American funds, 
it will be a big problem for it," Widmer-Schlumpf said.

She indicated that the Swiss government had been presented with a take it or leave it offer by Washington.

"It was a unilateral offer, one that we couldn't negotiate," she said.
   
She rejected reports that the Swiss taxpayer would have to come up with at least part of the funds.
   
"Switzerland will pay nothing," she insisted.

The deal, which will require approval by parliament, frees up Swiss banks to circumvent  some elements of secrecy laws and turn over key information to US authorities.

Washington has repeatedly accused Swiss banks of complicity in tax evasion, since they hold billions of dollars belonging to American citizens accused of hiding away taxable income from the US revenue service.

"We hope that it will enable this chapter to be closed," Widmer-Schlumpf said, noting that it was nonetheless up to individual banks to decide if they wanted to cooperate with US authorities.
   
However, any bank failing to toe the line risks being barred from the US 
market.

Widmer-Schlumpf underlined that the goal of the deal was to create a legal framework under which the banks themselves could win legal closure of their disputes with the United States.
   
A bill on the deal will be put to parliament next month, and the 
implementation of its provisions will be limited to one year.
   
In a statement, the government said the bill "authorizes banks to cooperate 
with the US authorities and to make available the information necessary to safeguard their interests".
 
"This includes in particular information about business relationships 
concerning US persons and details on people who were involved in the US business of the respective banks," it said.
   
With the global economic crisis having put tax havens into sharp focus, 
Switzerland has fought to defend its long-cherished principle of banking secrecy by giving ground in some areas but declining to allow the automatic handover of account details.
   
The government said that while the names of US clients can be handed over 
automatically, their account details can only be disclosed if Washington makes a specific request under rules related to the pursuit of tax dodgers.
   
Previous reports have said the 300 banks in Switzerland would be ranked by 
their level of alleged complicity in tax evasion.
 
The dozen seen as the main offenders would reportedly be forced to make 
individual deals, while a second category, comprising those with American clients but which have not yet faced legal action in the United States, would have to pay a set fine.
   
Under the accord agreed 
Wednesday, Swiss banks will give details of employees who deal with American clients.
   
In April 2012, Washington won the handover of the names of 10,000 such 
employees from some Swiss banks.
   
That came after a green light from the government, which faced criticism 
from banking sector employees for potentially exposing them to charges of abetting tax evasion.
   
The new deal would be far larger in scope, and the government said banks 
"will be obliged by law to provide maximum protection for their employees", including against dismissal, with a 2.5-million-Swiss-franc fund created by the banks for this purpose.

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TRAVEL

Berlin Schönefeld airport set to close in March 2021

Now operating as a terminal in the new BER airport, the former Schönefeld airport is set to stop operations in March 2021 in a bid to cut costs.

Berlin Schönefeld airport set to close in March 2021
The former Schönefeld airport, which is currently being used a Terminal 5 of the new BER airport. Photo: DPA

Since the Berlin Brandenburg airport (BER) opened after a nine-year delay on October 31st, Schönefeld (SXF) Airport automatically became BER Terminal 5. 

READ ALSO: Berlin Brandenburg (BER) airport to finally open following nine-year delay

But in light of dwindling passenger numbers, Schönefeld is set to close in March 2021.

However, the former airport – known for being a hub for discount flights in the south of Berlin – will initially close for one year, before the BER airport committee reviews whether to keep it closed permanently. 

“We have to think about whether we really need T5 in 2021,” said airport boss Lütke Daldrup. He pointed out that airport traffic in Berlin in 2020 has been only a tenth of what it was the previously year. 

“All German airports together are expecting a decline in profits of 75 percent in 2020 and a drop of 65 percent in 2021 compared to 2019,” Daldrup told the Berliner Morgenpost on Sunday.

Flight traffic is currently experiencing as dramatic a dip as it did in the spring, amid a more stringent lockdown in Germany, said Daldrup. 

Air traffic experienced a brief revival over the summer, however, which is why Tegel airport was kept open a few months longer than initially planned.

The northern Berlin airport saw its last flight depart on November 8th. 

READ ALSO: Berlin's airport closes following last flight to Tegel

Both the main Terminal 1 and Terminal 2 at BER are slated to remain open, with some airlines at Schönefeld shifting over following the closure.

The discount airlines Ryanair and WizzAir are especially affected by the move, reported the Morgenpost, as they will have to pay greater fees to park at the modernised BER. 

According to current calculations, BER's airport company needs another €500 to €550 million for the coming year, as Finance Senator Matthias Kollatz of the centre-left Social Democrats (SPD) recently said.

Daldrup said he therefore did not expect much resistance to the closure of Schönefeld, which is located about 20 kilometres south of the centre of Berlin. 

 

 
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