UK and Switzerland in tit-for-tat row

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The Independent Online

A diplomatic row erupted yesterday between the UK and Switzerland after Britain used a key economic conference to attack the small European state's banking secrecy as an obstacle to the fight against terrorism.

A diplomatic row erupted yesterday between the UK and Switzerland after Britain used a key economic conference to attack the small European state's banking secrecy as an obstacle to the fight against terrorism.

Paul Boateng, the Financial Secretary to the Treasury, told his Swiss colleagues to reform their banking system to bring it into line with new global rules aimed at clamping down on tax evasion and choking the supply of money to terrorists.

The attack drew an angry response from the Swiss who accused Britain of trying to link its centuries old tradition of confidential banking with the traffic in "hot" money. "This is simply a lie," the Swiss delegate said.

The UK minister made his attack at the annual meetings of the Organisation for Economic Co-operation and Development, of which the UK and Switzerland are members. "We have sent a very clear message in relation to fair tax and tax havens and that has gone very clearly to Switzerland and Luxembourg as to what we expect," he told The Independent on the fringes of the high-profile meetings.

In retaliation, the Swiss called for the final OECD communiqué to call for identification of the beneficiaries of certain trusts, corporate vehicles and shell companies – a reference to financial techniques used in the City of London. The UK succeeded in blocking this.

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