Swiss Banking Secrecy
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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).
