Swiss Banking Secrecy

Origin and Raison d'etre of Banking Secrecy

In any democracy the citizen is entitled to protection of his privacy: it is one of the fundamental guarantees of individual liberty and is recognised as such by the Universal Declaration of Human Rights. The right to privacy is guaranteed in the financial field by the discretion incumbent on every banker. This applies as much to banking transactions undertaken by clients in relation to their private lives as to their business transactions.

It is for this reason that banking secrecy exists in one form or another in most states. That being said, in many countries its extent has been considerably curtailed by the introduction of often draconian regulations limiting the transfer of capital and by taxation which at times almost amounts to confiscation.

In 1934 an article was introduced into the law of Switzerland making any breach of banking secrecy a criminal offence punishable by imprisonment for up to six months or by fines up to Sfr.50,000. - or both. It is worth recalling that this decision was a political act by which the Federal assembly wished to show its independence and neutrality. This standard having been tabled from the very start of work on a new banking law, its adoption was more widely supported owing to fears engendered by the coming to power in Germany of the National-Socialist government, which threatened the person and property of its opponents and of minorities, on political or racial grounds. It is noteworthy that the obligation of discretion on the part of the banker vis-?-vis his client is equally protected under civil, contract and administrative law. In certain cases, its violation could be considered as an act of economic espionage {Article 273, Swiss Penal Code, SPC}.

The obligation to maintain banking secrecy applies to all those who are employed by or are members of any part of a bank, as well as to its auditors and the members of its board of directors. It continues even after termination of their employment (Federal Law on Banks and Savings Banks of 8 November 1934, Article 47).

• Banking Secrecy Has Never Been Absolute
• The Identity of the Client is Always Known to the Bank
• Domestic Law: Procedure
• Preserving Documents
• Marriage
• Protection of Personal Data
• Tax Authorities
• Foreign Banks
• Criminal Law
• Funds Derived From Drug-Trafficking
• The Exercise of Due Diligence
• The Fight against Money Laundering in the Financial Sector
• Conclusion

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