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TAX EVASION

US indicts senior Swiss banker in tax fraud case

The US Justice Department has indicted a 66-year-old Swiss banker for helping US taxpayers hide millions of dollars in assets in offshore accounts over nearly two decades to avoid paying taxes.

US indicts senior Swiss banker in tax fraud case
Photo: AFP/Getty Images/File

The department said on Thursday that Martin Dunki, working for the small bank Rahn & Bodmer Co., continued to help clients hide money even after the US government fined Swiss bank UBS $780 million in 2009 for doing the same.
   
Beginning in 1995 Dunki helped US clients place money in accounts of foundations and foreign-based companies not linked to the on paper, the indictment said.
   
After the US authorities began cracking down on tax avoidance, in 2009 Dunki and co-conspirators took the money from clients' accounts and used it to buy gold and other precious metals which were transferred to escrow accounts in his bank, according to the indictment.
   
Then the assets were moved to a vault in UBS for safekeeping. Dunki later travelled to the United States to report to the clients on their assets.
   
He also helped repatriate funds to the clients in ways that would prevent US officials from discovering the undeclared accounts, the indictment said.
   
The indictment named Zurich lawyer Edgar Paltzer as one of the co-conspirators.
   
"Martin Dunki went to great lengths to help his US taxpayer clients secrete away millions of dollars in Swiss bank accounts," said Preet Bharara, the US attorney in New York.
   
"With today's indictment, Dunki joins the ranks of many other individuals this office has charged in connection with hiding money in offshore bank accounts from the Internal Revenue Service."
   
Dunki is charged with one count of conspiracy to defraud the US Internal Revenue Service, a charge which brings a maximum five years in prison.
   
He lives in Switzerland and has not been arrested, the justice department said.

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TAX EVASION

Switzerland’s banks remain among the world’s most secretive

Despite the progress made over the years, the Swiss financial sector continues to be one of the least transparent in the world. But there is good news too.

Switzerland’s banks remain among the world’s most secretive
Switzerland remains one of the world's least transparent nations. Photo AFP

Switzerland is in the third place in the 2020 Financial Secrecy Index released by the non-governmental organisation (NGO) Tax Justice Network (TJN), which rates 133 nations based on their financial transparency.

Two other European countries, Luxembourg and the Netherlands, are also ranked among the top 10 least transparent nations on the TJN’s list.

Despite being in the third place, Switzerland ranks better this year than it did in the previous edition of the Index, which is released every two years — it slipped from the first to third place. The Cayman Islands and the United States took the first and second spots, respectively.

Switzerland reduced its risk of being an offshore haven for tax cheats by 12 percent, “finally improving enough to move off the top of the index”, TJN said. 

READ MORE: Switzerland's strangest taxes – and what happens if you don't pay them

This improvement is mainly due to Switzerland extending its international network for the automatic exchange of customer information to more than 100 countries. 

Also, in a referendum held last year, Swiss voters accepted the Federal Act on Tax Reform and AVS Financing (TRAF). This legislation introduced major changes in the Swiss tax system by ending some preferential tax schemes and replacing them with new regulations which are in line with international standards.

This tax reform prompted the European Union to change Switzerland's status from ‘tax haven' to one which is EU-compliant, removing strict controls on transactions within the EU. 

So why, despite all the reforms, does Switzerland still rank among the world’s least transparent nations?

According to a Swiss NGO Alliance Sud, wealthy people from poor countries can still hide their money here from the tax authorities of their home nations.

Alliance Sud noted that despite the progress made in the past years by Swiss financial institutions, “the fight against tax evasion remains insufficient”.

Switzerland is the world’s biggest centre for managing offshore wealth, with a quarter of global assets invested here.

For years, it has been placed on various lists of tax havens where wealthy foreigners could park their money. Faced with widespread criticism for this practice, Switzerland passed an anti-money laundering law in 1997 and introduced strict regulations against tax evasion.
 

 

 
 

 

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