UPDATE 1-Italian minister says ban on Swiss banks is tax matter

Tue Feb 18, 2014 9:33am EST

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(Adds minister's quote and background)

BRUSSELS Feb 18 (Reuters) - Italy's economy minister said on Tuesday that measures to stop Swiss banks from selling financial products to Italian retail clients have been in place for some time and are in response to tax evasion rather the Alpine country's stance on immigration.

Swiss voters this month backed proposals to curtail the relatively free movement of citizens to and from the European Union, drawing sharp criticism from the European Commission in Brussels and prompting France to say it would review its diplomatic relationship with Berne.

Swiss Diplomat Jacques de Watteville said on Monday that Italian officials had made it clear to their Swiss counterparts that they would block Swiss banks from selling retail products to Italians unless Berne ensures the free movement of people between the two countries.

However, outgoing Italian Economy Minister Fabrizio Saccomanni said on Tuesday that Swiss banks were already barred from selling such products in Italy, indicating that the measures are more of a bargaining tool in tense talks aimed at helping Rome to obtain information about wealth hidden in Switzerland by Italian taxpayers.

"To say that this (Italian stance) is the result of the (immigration) referendum seems to me excessive," Saccomanni told reporters in Brussels, adding that negotiations between the countries are focused on the exchange of tax information.

"But the referendum is something that will be taken into account as negotiations continue," Saccomanni added.

Swiss banks offer wealth management and investment banking services in Italy but do not have commercial banking operations in the country because Rome has placed the Alpine state on what Saccomanni described as a "blacklist" of countries that do not fully cooperate on tax matters. (Reporting by Francesco Guarascio; Writing by Lisa Jucca; Editing by David Goodman)

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