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Swiss Banking Secrecy
Legal Basis
The Swiss banker’s professional duty of client confidentiality is rooted in Article 47 of the Federal Law on Banks and Savings Banks, which came into force on November 8, 1934. The article stipulates that anyone acting in his/her capacity as member of a banking body, as a bank employee, agent, liquidator or auditor, as an observer of the Swiss Federal Banking
Commission (SFBC), or as a member of a body or an employee belonging to an accredited auditing institution, is not permitted to divulge information entrusted to him/her or of which he/she has been apprised because of his/her position.
Although the Federal Law refers to banking secrecy”, it is important to note that this duty of discretion is not intended to protect the bank but the client. In that sense, the terms “bank client confidentiality” or “financial privacy” are much more appropriate.
It is a question of protecting personal privacy, a basic right established under the Swiss constitution (Art. 13) wherein the Swiss legislation guarantees respect for privacy.
Limits of Swiss banking secrecy
Any attempt by a third party to obtain details of the beneficial ownership will be responded to with a request for a Swiss court order. The Swiss court will hear a submission of evidence from foreign governmental agencies, but in practice they are infrequent and difficult to pursue. The Swiss courts do not protect criminals or money laundering, but, Federal law in Switzerland does not consider tax mitigation as a crime.
Consequences of violating Swiss banking secrecy
Any violation of Swiss banking secrecy, whether through negligence or intentionally, is punishable by a prison sentence (maximum 6 months) or by a fine of up to CHF 50,000 (CHF 30,000 in case of negligence).
Violating Swiss banking secrecy remains a punishable offence even after the relationship with the client has come to an end or the banker has ceased his/her professional activity (Art. 47, Federal Law on Banks and Savings Banks).
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