From Olivier Longchamp, a guest blogger in Lausanne:
"At the end of last year French and Swiss authorities became embroiled in what has become known as the HSBC affair. From a former employee of HSBC, Hervé Falciani, the French tax authorities received a list of clients of that bank’s Geneva branch. They intended to use the data to request fiscal information from the Swiss authorities. The Swiss government strongly protested against this use of the list, which, in the Swiss view, had been stolen. Under Swiss law Falciani had breached banking secrecy and was therefore guilty of a criminal offence punishable by imprisonment.
Cheerleaders of the Swiss financial sector protested to the French authorities, accusing them of dealing with stolen assets. The latter replied that it was nearly impossible to gather information about French taxpayers stashing away part of their income or savings in Swiss banks in any other way.
The fervent and high profile fight was not, in fact, about the use of the list itself – which was, ironically, brought to the attention of French authorities by the Swiss, who previously intended to prosecute Falciani for breaching Swiss bank secrecy – but about the terms of application of the amendment to the Swiss-French double taxation agreement (DTA) concluded last summer. Following the French government’s interpretation of article 10, e), this new OECD-model DTA obliges Swiss authorities to gather banking information about French taxpayers even if their banking connections are not clearly identified (« dans la mesure où ils sont connus » - « as far as they are known »).
According to Swiss officials this is impossible, since it would require the introduction of some kind of a bank accounts survey - thereby breaching banking secrecy. The Swiss finance minister, Hans-Rudolf Merz, didn’t wait before announcing that under these circumstances, he would settle the amendment’s submission in the Parliament of the Swiss-French DTA, which was at first scheduled in March of this year.
But this is not the end of the story. Meeting at the end of January at the World Economic Forum in Davos, Merz and his French counterpart, Eric Woerth, apparently came to an agreement about the use of the names on Falciani’s list. Interestingly, the agreement was presented in completely divergent ways in the French newspaper Le Monde and in the Swiss Le Temps, in spite of their habitual editorial collaboration. The latter reported that, according to the Swiss finance minister, the French authorities had agreed not to use the data figuring in Falciani’s list, nor to pass the list to fiscal administrations of other countries.
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