Employers group rejects opening up bank records

The major organization of private employees has come out against a proposed law that would lift bank secrecy and give full access to account information to tax authorities. The measure is being considered in a legislative committee.

The organization is the Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado. The organization said that no one should be able to penetrate bank account records without the order of a judge.

Costa Rica is trying to comply with international rules against money laundering and tax evasion. But the employers chamber said that this can be done without opening up the bank records of every resident and anyone who has an account here.

The principal proponent of bank transparency is the Paris-based Organization for Economic Co-operation and Development. Periodically the organization puts Costa Rica on a blacklist because it disagrees with the structure of the country’s laws.

The Organisation for Economic Co-operation has been agitating to open bank accounts since at least 2000. It said in a report then that “ideally all member countries should permit access to bank information, directly or indirectly, for all tax purposes so that tax authorities can fully discharge their revenue-raising responsibilities and engage in effective exchange of information.”

Primary members of the organization are those First World countries that fear citizens are hiding assets and income overseas. The U.S. Internal Revenue Service is among those agencies that seek aggressively information on its citizens from foreign sources. The United States has taxed the
foreign earnings of its citizen expats since the 1970s.

In fact, a lot of that information is available already to U.S. tax snoops because nearly all data on Costa Rican bank accounts are in the hands of the Superintendencia de Entidades Financieras, a government agency.

The terrorist attacks Sept. 11, 2001, gave a big push to international bank oversight, and it is the Superintendencia that interprets the country’s anti-drug laws that require expats to spend long hours with bank workers outlining the sources of their funds. Those who do not find their accounts frozen, although such actions differ from bank to bank.

The current proposal in the legislature would give national as well as international tax authorities full access to account information without the knowledge of the bank customer and at the whim of the tax agency, and the employer group said that the provisions of the measure are well beyond what the international organization requires.

The employers group said that Costa Rica has done enough to comply with international agreements and that nine countries in the Americas have similar bank secrecy laws and that some European countries still require the approval of a judge. That would mean the taxing authorities would have to provide probable cause instead of just cherry pick.

The employers group is motivated partially by security concerns. A highly placed Costa Rican investigative official was detained on suspicion that he used his office to provide inside financial information on potential check-fraud victims to crooks. Under the proposed legislation bank information would be available much more widely.

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