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Swiss Bankers Urge EU Deals to Root Out Tax Cheats

FILE - National flags of Switzerland fly over the entrance of the headquarters of Swiss bank Credit Suisse in Zurich July 31, 2014.

The head of Switzerland's banking association urged the government on Tuesday to strike deals with European neighbors to root out untaxed money in the country and make it easier for Swiss banks to do business abroad.

Switzerland has all but abandoned banking secrecy by joining the ranks of countries committed to sharing tax information between governments. But it is mired in negotiations with several European countries about how to deal with undeclared client assets that are still held in Swiss bank accounts.

The country has reached withholding tax deals with Britain and Austria, under which nearly 30,000 Swiss account holders came forward last year to pay tax on assets they had previously kept hidden from their taxman at home.

The government has yet to reach agreements with other key European neighbors, an urgent need for its banks, the head the Swiss Bankers Association (SBA) said, as such deals can smooth the way for Swiss banks to do business in these markets.

“We do not have such a solution with France, with Italy, with Spain and that is clearly a priority for us,” SBA chief executive Claude-Alain Margelisch told a news conference.

Switzerland's pledge to share data with other governments from an as yet unclear date represents an informal deadline for itself as well as European neighbors.

Eager to keep cash at home

The country is keen for previously undeclared foreign cash to stay within its borders, while foreign governments are wary of the new rules pushing the money to other offshore wealth centers which still guarantee secrecy.

The Swiss government is in talks over bilateral deals with Italy and France, a spokesman for Switzerland's State Secretariat for International Financial Matters said. However, there were currently no talks on Spain over a similar agreement.

Disagreements over inheritance tax and how to tax foreign citizens who commute into Switzerland are some of the issues believed to be holding up deals with France and Italy.

Reinforcing the need to strike separate bilateral agreements, Swiss-EU relations have been made more complicated by a February referendum, in which Swiss voters narrowly backed proposals to reintroduce immigration quotas with the European Union.

“It is therefore - in a first phase - imperative for our political authorities to negotiate intergovernmental agreements with individual countries in the EU,” Patrick Odier, SBA chairman and partner at Swiss private bank Lombard Odier, said at the news conference.