Swiss banks refuse blame for foreign clients' tax evasion

GENEVA: Swiss banks cannot be expected to police foreign clients' tax affairs, one of the country's top banking officials on Monday, rejecting German demands for greater cooperation to catch tax evaders.

The president of the Swiss Bankers Association laid the blame for tax evasion squarely at the feet of governments that demand too much of their citizens' income.

"Countries which worry about tax evasion of their citizens should have a good think about the way they tax their people," Pierre Mirabaud told journalists in Geneva.

The European Union, in particular Germany, has been pressuring Switzerland to crack down on EU citizens, who hide money in Swiss banks in order to avoid paying higher taxes at home.

Switzerland, which is not a member of the 27-nation bloc, fiercely protects the privacy of banking customers, including foreigners who have deposited more than 1 trillion Swiss francs ($950 billion) in its vaults.

"It's necessary to clearly show Germany and the European Union where their sphere of influence ends and where our sovereignty begins. We are not a tax authority and we are not a police authority," he said.

Leading Swiss politicians and bankers reacted with outrage earlier this year when it was revealed that German intelligence had purchased confidential information on bank customers in neighboring Liechtenstein.

The information led to a series of high-profile raids against individuals and businesses in Germany, as well as further investigations by authorities in Britain, France, Italy, Spain, Canada, the US, Australia and New Zealand.