Italian authorities target Swiss banks in wake of UBS fine

Italian authorities target Swiss banks in wake of UBS fine

Guardia di Finanza, a financial police authority in Italy, has sent letters demanding Swiss lenders to reveal the the names of bankers working in the country, Bloomberg has reported.

The authority wants to know more about the business that these banks entertain in Italy, in particular which type of business, how money is being administered and who the banks employ in the country.

The Italians have sent similar letters to banks in Liechtenstein and Monaco. The letter contains a deadline, by which the answer should be forthcoming and lawyers therefore believe that Italy will attempt to steadily increase pressure on the companies or even pass on the data provided to prosecutors.

The Swiss Bankers Association was notified by the banks addressed by Italian police and is advising its members on how to react appropriately, having also consulted Swiss authorities. 

While the motivation behind the crackdown is to ensure Swiss banks pay Italian taxes, the data could be passed on to prosecutors, says Paolo Bernasconi, a lawyer in Lugano, Switzerland. The Guardia di Finanza also ratcheted up pressure by demanding a response within 20 days of sending the questionnaire at the end of January.

"Could a lack of response be considered as an indication of an infraction, leading to the opening of fiscal proceedings, or even criminal proceedings?"  Bernasconi, a former Ticino prosecutor, said.

Italian authorities got about €20bn (Dh83.06bn) in 2017 from cracking down on evasion, a 5.6 per cent increase from a year earlier, in part from a tax amnesty the government offered to encourage citizens to repatriate money stashed abroad.

Lugano, in the Italian-speaking Swiss canton of Ticino, became Switzerland's third-largest financial hub by catering to wealthy Italians but has seen its number of banks drop by more than 40% over the past decade amid an Italian crackdown on tax evasion.

 In 2015, the country signed a tax deal with Switzerland that included the automatic exchange of information, which began in 2018.