Court says disclosure of bank employee’s data ‘illegal’

The ex-Credit Suisse employee accused his employer of having handed over to the US authorities 1,623 pieces of information about him between April and October 2012 swissinfo.ch

A Swiss court has ruled that the transfer of a former Credit Suisse bank employee’s data to the United States as part of American tax evasion investigations was illegal. 

The ruling, which was made public on Monday by the bank employees’ lawyers, forbids the bank from communicating to the US authorities information identifying an employee. This is the first decision of its kind by a Swiss court. 

A Credit Suisse employee had brought the case before the Geneva court of first instance, accusing his employer of having handed over to the US authorities 1,623 pieces of information about him between April and October 2012. 

In its verdict of May 28, the court “noted the illegal nature of the transmission by Credit Suisse to the US authorities, outside of an international mutual legal procedure, of documents containing data on the former employee”. The data either “identified him or allowed him to be identified”. 

The court recognised that the bank had an important reason to continue to collaborate with the US authorities, which have repeatedly stated that they intend to prosecute people who helped US tax evaders. But it said the former employee’s interest not to have his name disclosed was supreme. 

“This first ruling represents an important victory,” said Douglas Hornung, who represents the interests of several bank employees.  This should also influence future cases in Switzerland, estimated at 400. 

The ruling is not definitive, however, as Credit Suisse plans to appeal. 

“The court has only judged one case and does not state that cooperation following Swiss cabinet authorisation was generally illegal,” a bank spokesman told the Swiss News Agency.

If Credit Suisse does not respect the ban on handing over employee data, it could be sanctioned under the Swiss Penal Code, according to the judgement. A maximum CHF1 million fine is foreseen. 

The ruling highlights Switzerland’s difficulties in balancing traditions of personal privacy against US demands for data from roughly a dozen Swiss banks that have been under formal investigation by US prosecutors.

In May 2014 Credit Suisse, which was one of these under investigation, agreed to pay a $2.5 billion fine to US authorities for helping Americans evade taxes after becoming the largest bank in 20 years to plead guilty to US criminal charge. 

As part of the wider US tax evasion investigations some banks, including Credit Suisse, have been handing over information on their US dealings for nearly two years, part of efforts to avoid indictment and minimise fines for their role in helping wealthy Americans to evade taxes. 

In July 2013, Credit Suisse and the Zurich Cantonal Bank admitted that they had been given special government permission to hand over such data. The government had also given temporary permission for some banks to hand over employees’ names a year earlier. 

In August 2013, the Swiss cabinet struck a deal with the US Department of Justice which formalised the process in a treaty. 

In 2014 it was reported that Credit Suisse had informed over 1,000 employees that their names were being handed over in the course of US tax evasion investigations by the US. Former and current client advisors who processed payment authorisations for US clients were those affected.

To allow banks to comply with the US programme, they were allowed to disclose information about their American business operations, apart from details of clients or their accounts. Former and current employees who were involved had to be given prior warning to allow them to engage legal assistance.