Offshore
Credit Suisse Defies Canada's Client Account Data Demands
Credit Suisse is trying to quash a federal court order that requires the bank to hand over 500 boxes of records to tax collectors in Canada, according to the Globe and Mail.
In October, Canada Revenue Agency auditors obtained a judicial order for Credit Suisse Canada, which operated private banking offices in Toronto, Montreal and Vancouver until 1998, to provide all of its archived records.
The order was based on the confession of a Canadian resident – identified only as “Taxpayer X” in court documents – who told federal auditors he was encouraged by his investment advisor to hide his savings from CRA and, as a first step, to funnel his funds to the Swiss city of Lausanne via a now defunct Credit Suisse office in Vancouver, the report said.
The bank struck back late last week with an application to nullify the order, arguing among other things that it is “inordinately broad.” No date has been set for a federal court judge to hear the case, the G&M report said.
The publication quoted Credit Suisse as saying: “Canadian law requires certain conditions to be met before CRA can issue such a request and we do not believe that those legal conditions have been satisfied. Furthermore, we are very concerned about the personal and financial privacy interests of our clients.”
In the neighbouring US, much of the attention on the role of offshore Swiss bank accounts has focused on UBS, which last year paid a $780 million fine and handed over thousands of client account details to settle a criminal and civil case over tax evasion. That bank no longer provides offshore banking for US clients. Governments such as those of Canada, the US, Germany, UK and France are waging a campaign against tax evasion and offshore financial services.
So far, Credit Suisse, which has not suffered anything like the same huge market-related losses as UBS, has also managed to stay largely out of the North American firing line on the offshore bank account issue.
Some organisations, such as the Washington DC-based CATO Institute, have argued that pressure against offshore banking and G20 calls for more tax data exchange are a form of financial protectionism and will damage the world economy in the long run.
