The implications of the closure of Wegelin for the rest of Switzerland's secretive banks are far reaching indeed.
It is not just that the bank has admitted to helping more than 100 US citizens hide assets from their domestic taxman – for which it will pay a fine of nearly $60m, and then shut down. It is also that, when executives at the 270-year-old bank told a New York court that such practices, while wrong, were common in their industry, the US authorities were handed a signal victory in the fight over tax and transparency of which the Wegelin affair is just one example.
But the growing attention to the offshore tax arrangements both of individuals and corporations does not begin and end with Switzerland. David Cameron marked the start of Britain's presidency of the G8 this week by putting tax avoidance at the top of the agenda for the Lough Erne summit in June, spurred on not just by the gaping hole in the public coffers but also by recent revelations of the legal – yet expensive – avoidance strategies being practised by big companies such as Amazon and Starbucks.
The Prime Minister is half right; international co-operation is central to a meaningful clampdown on companies gaming different countries' tax rules. But the UK is not only sinned against, it is also sinning. After all, any number of British territories – from Jersey to Bermuda to the Cayman Islands – appear on the list of global tax havens where anonymity and, often, a no-questions-asked approach shelter deposits from prying eyes back home. And for all the tough talk, rumours of a UK version of the US Foreign Account Tax Compliance Act now making such waves in Switzerland – which would force offshore financial institutions to reveal the identities of account-holders – are yet to turn into any formal proposals.
There is a lesson from the Wegelin saga. If the US can force a bank in another country to abide by its rules, we can do something about, say, the British Virgin Islands. Mr Cameron yesterday upped the pressure on foreign companies ducking UK taxes, saying they lack "moral scruples". His Government should, then, be doing more to close down the UK's own havens.
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