Swiss to exclude stolen data from tax cooperation
* Says assistance must be in public interest
* New ordinance follows row with France over stolen data
ZURICH, Jan 20 (Reuters) - Switzerland will not cooperate with foreign authorities on tax cases where client data has been stolen from banks, its Finance Department said on Wednesday, following a recent spat with France.
"No administrative assistance can be provided in the case of violation of public policy or the principle of good faith," the department said in a statement.
A recent case involving data theft from HSBC's (HSBA.L) private bank in Geneva sparked a diplomatic row with France, leading the Swiss government to freeze negotiations for a new bilateral tax agreement.
"This refers specifically to the case of HSBC of course," Finance Department Deputy Secretary General Thomas Saegesser told Reuters. "If a demand from another state were against the public interest, a state would not be informed."
Switzerland, which manages trillions of dollars in offshore wealth, relaxed its cherished bank secrecy and agreed to comply with international standards last year after its banks came under pressure from foreign authorities.
The country's private banks have been lobbying the government to introduce clauses banning the use of stolen bank data in a raft of tax cooperation treaties it is negotiating.
A new ordinance, probably coming into force Oct. 1, would seek to establish clear limits for handing over client data at the request of other states, Saegesser said.
"The competent authority has to decide in every individual case what constitutes the public interest," he said.
The ordinance would be followed by a new act to anchor the rules in legislation. The department said in its statement: "Legal considerations have now prompted the Federal Council (cabinet) to regulate the topic at the legislative level".
HSBC said in December a former employee stole client data from its Swiss private bank's headquarters in 2006 and 2007, a breach of Swiss bank secrecy, although fewer than 10 clients were involved. [ID:nGEE5B81AP]
The HSBC case recalled a larger theft at Liechtenstein's main bank LGT, in which stolen data ended up with German tax authorities and sparked a huge investigation into tax evasion.
A bitter dispute between U.S. tax authorities and UBS (UBSN.VX) (UBS.N) damaged the Swiss industry's reputation and forced the bank to agree to hand over the names of about 4,450 clients suspected of tax evasion.
Earlier this month, the Organisation for Economic Cooperation and Development, at the forefront of an international crackdown on tax evasion, said it would not object to governments using stolen bank data to track down tax cheats in offshore centres. [ID:nLDE60I19W] (Reporting by Jason Rhodes; Editing by Dan Lalor)
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