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Mon Aug 29, 2016, 06:15 PM

Bank secrecy rules face ‘lethal blow’ in Uruguay. [View all]

Described by government officials as a “lethal blow” to bank secrecy, the administration of Uruguayan President Tabaré Vázquez has sent a bill to Congress that would force banks to automatically provide the DGI tax bureau information on the accounts held by individuals and companies, both Uruguayans and foreign citizens.

The bill, if passed, would eliminate the current need for a court order to access the data.

According to Uruguay’s Central Bank, accounts opened by Argentines account for 75% of the funds declared in the country by foreign citizens, with most of the rest from Brazil. The move would put pressure on the estimated $3.3 billion held by Argentines in Uruguay; over the last five years, Argentine deposits have grown by 52%.

These official numbers, however, only include regular retail banks, leaving aside those who choose to manage their money through offshore banks located in Uruguay such as HSBC. HSBC had its license to operate in Argentina suspended last year after evidence surfaced in the SwissLeaks scandal that it had helped wealthy locals evade taxes on some $4 billion; this license was reinstated by the right-wing Mauricio Macri administration.

Such entities will also be in the spotlight with the new bill, which would create a record of final beneficiaries so as to reveal the true identities behind each account. Uruguay would also steeply increase taxes charged on offshore entities that work in Uruguay so as to discourage their transactions in the country.

There are about 1,900 foreign companies using Uruguay as a tax haven, according to DGI data. More than 1,600 were created for real-estate projects, many of them by Argentine and Brazilian citizens.

The move follows stricter rules already implemented by former President José “Pepe” Mujica to prevent money laundering. Previously, those opening a bank account in Uruguay were not required to must explain where the funds originated, or even present valid identification.

“The government wants to expel offshore entities from Uruguay. Tabaré Vázquez doesn’t want them in the country,” Guzmán Ramírez, lawyer at the Bergstein firm, told the Herald. “The move will mainly affect real estate Argentines have through offshore societies. Taxes are going to be much higher.”

At: http://buenosairesherald.com/article/220685/bank-secrecy-rules-face-%E2%80%98lethal-blow%E2%80%99-in-uruguay

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Reply Bank secrecy rules face ‘lethal blow’ in Uruguay. [View all]
forest444 Aug 2016 OP
Judi Lynn Aug 2016 #1