Brussels, 17/05/2004 (Agence Europe) - On Monday, the General Affairs Council approved the result of bilateral negotiations with Switzerland on tax on savings, Schengen/Dublin and the fight against fraud (EUROPE of 15 May, p.11). Austria lifted its final "scrutiny reservations" on the text defined last week by the Permanent Representatives. The agreement will allow the Council to decide, on 2 June, on the entry into force of the directive on taxation of savings revenue as of 1 January 2005. This result will be confirmed on 19 May, at a Summit in Brussels between the President of the Commission, Romano Prodi, the Irish Deputy Prime Minister, Mary Harney, the President of the Swiss Confederation, Joseph Deiss and the chief of the Swiss Foreign Affairs Department, Micheline Calmy-Rey.
The final differences of opinion focused on the future evolution of the Schengen agreements, in which Switzerland is to take part. Berne secured a transition period for direct taxation, if "dual criminal liability" is to be abandoned in the future. In the latest theatricals, at the Ecofin Council of 11 May, Luxembourg demanded the same guarantees as Switzerland on banking secrecy. It managed to get the Council to agree to adopt, on 2 June, a statement certifying that equality of treatment between Member States and third countries will be kept in place in the context of future development of legal co-operation, on direct taxation.
France, the Netherlands, Italy, Sweden and Spain presented a unilateral statement to be annexed to the Council minutes on 2 June. To guarantee that changes to the Schengen agreements cannot be blocked by a Swiss veto, they stipulate that legal and administrative co-operation goes beyond the simple issue of tax on savings. They point out that the ultimate goal of the directive on tax on savings is "information exchange" (and not tax at source, which will be applied by Luxembourg, Austria, Belgium, Switzerland and four other third countries: Ed). In any hypothesis, the five "call for international co-operation in this sense".