| Switzerland rushed into the arms of the European Union The European Union and Switzerland have finally initialed nine cooperation agreements. Switzerland negotiated for itself the preservation of the right to banking secrecy. But in exchange for this, she will have to transfer a billion Swiss francs ($811 million) to Brussels over five years to help new EU members and open up their labor market for them.
Negotiations between Switzerland and the EU have been ongoing since 2000. The agreements reached are important for both parties. Switzerland has essentially become an enclave within the European Union, accounting for 69% of its foreign trade. On the other hand, Switzerland is the second economic partner of the EU after the USA. Although the official political statement on reaching an agreement was solemnly signed by the President of the European Commission and the President of the Swiss Confederation on May 19, the paperwork dragged on for another month and a half.
The most heated debates were caused by the taxation of income from bank deposits and the fight against tax evasion. This is extremely important for EU countries suffering from budget deficits, while Swiss banks are hiding huge amounts from taxes. Therefore, when Switzerland expressed a desire to join the Schengen Agreement, Brussels was able to demand that Bern tighten its banking policy.
EU legislation provides for the exchange of information on all facts of tax evasion. However, Bern defended the principle of double punishment - Switzerland will help Brussels only when the offense is interpreted equally by both sides. In Switzerland, it is not a criminal offense for non-residents to evade taxes in their home country. But now residents of EU member countries (non-Europeans) who have deposits in Swiss banks will be charged the so-called “withholding tax” that has long been levied in Switzerland on interest accrued on deposits in Swiss francs. Within five years it will be increased from 15 to 35%. 75% of the collected amount will be transferred to the European Union, but without reporting information about specific accounts, unless we are talking about legal assistance in cases of tax fraud.
Switzerland, having insisted on its own, saved the institution of bank secrecy throughout Europe. EU members Austria, Belgium and Luxembourg immediately told the EU that sharing deposit information would harm their heavily banking-dependent economies. But for the sake of joining the Schengen Convention, which also provides for cooperation between authorities and the exchange of information, Switzerland agreed to assist with legal and administrative measures in the fight against smuggling and other crimes related to the evasion of indirect taxes (customs duties, VAT, excise taxes on alcohol and tobacco), subsidies and government procurement, as well as money laundering. At the same time, Switzerland has retained freedom in the exchange of information on matters relating to direct taxation of individuals and legal entities (income tax, corporate tax and profit tax). Any EU legal innovations in this area will not apply to Switzerland without a separate agreement.
Switzerland will not be subject to the EU directive on the introduction of duties on the re-export of products manufactured in any EU country. The fact is that in Switzerland, the geographical center of Europe, there are distribution centers for the products of many large European companies.
The set of agreements includes an agreement on exemption from customs duties for processed agricultural products (instant coffee, chocolate, biscuits, sauces, soups, dough products), which opens free access to the European market, primarily for Nestlé. Under other agreements, Switzerland joins the European Environment Agency, the statistical service Eurostat, and is allowed to participate in the Media project (creation and distribution of audiovisual products), and in educational programs. Finally, another agreement provides for the exemption from income tax in Switzerland of several dozen former EU employees who have retired.
Switzerland also accedes to the Dublin Treaty on Cooperation in the Field of Asylum, which makes it possible not to accept applications from persons who have already filed an application in another participating country.
But there is still a long way to go before all these agreements come into force. For the EU, only the agreement on combating tax fraud must receive the approval of all 25 of its member countries. Brussels expected to introduce taxation of deposits as early as January 1, 2005. But in Switzerland, with its direct democracy, everything is much more complicated. After consideration in parliament, each issue is put to a referendum, and all this will end no earlier than next spring.
The government has already announced that it will submit agreements to a so-called “optional referendum”, in which only the number of votes taken is taken into account. However, nationalist organizations intend to begin collecting signatures for a so-called “binding referendum”, in which, in addition to a majority of votes, it is also necessary to obtain the support of a majority of the country’s 26 cantons.
According to the Swiss constitution, such a plebiscite is held if an international agreement provides for accession to a collective security organization or to a supranational community. The government assures that none of the agreements are subject to this requirement. However, the influential People's Party and the mass organization Action for an Independent and Neutral Switzerland (ANNS) see it differently. As the director of the ANSH, member of parliament Hans Fehr, said, “joining the Schengen Convention is tantamount to joining a supranational organization,” and the government seeks to “drag the country into the EU by deception,” encroaching on the sovereignty of Switzerland. According to him, the agreement should be subject to a mandatory referendum, “as required by the constitution.” The road to entry into force of the agreements between the EU and Switzerland may be no less difficult than the negotiations that preceded their conclusion. Varvara SEMENOVA, Geneva |
|
