Swiss ‘justified’ in giving UBS bank data to US

Strasbourg judges ruled that Swiss economic interests took precedence in this case Keystone

A United States UBS bank client has failed in his bid to sue the Swiss authorities for handing his data to the US during a tax evasion row between the two countries. The European Court of Human Rights (ECHR) said the economic interests of Switzerland outweighed his individual privacy.

The Swiss bank client brought his case to Strasbourg after his file was handed to the US in 2012. He claimed that his right to family privacy had been broken, contravening article eight of the human rights convention.

But judges threw the case out on Tuesday on the grounds that Switzerland was justified in protecting its economic interests. The US was threatening criminal action against UBS unless the data was transmitted, which could have jeopardized the future of Switzerland’s largest bank.

Furthermore, the court noted that only the type of bank details that were handed over did not constitute personal information. And the client had been given the right to challenge the handover in the Swiss courts.

Handover history

UBS was fined $780 million (CHF772 million) in 2009 for aiding and abetting US tax evaders. The Department of Justice (DoJ) then demanded the names of more than 50,000 UBS clients, which it later trimmed down to 4,450.

The Swiss courts refused to allow the information to cross the Atlantic until the Swiss parliament gave the transmission legal status in 2010 by formally voting on the handover treaty.

The data handover was later extended to other banks, but sent over was only the numbers of accounts held by US citizens, the amounts held in those vaults and whether accounts had been transferred to other banks. This batch of information also controversially included the names of bank staff, lawyers and other third parties who had helped service US clients.

In August 2013, Switzerland signed a non-prosecution deal with the US that allowed banks to come clean about undeclared accounts of US clients in return for avoiding criminal action. Around 100 Swiss banks signed up to the deal with another 14 missing out because they were already facing criminal probes.

Switzerland has also signed the Foreign Account Tax Compliance Act with the US that automatically sends information about US clients opening Swiss bank accounts to the US tax authorities. At the start of 2018 a similar automatic exchange system will start operating between Switzerland and other countries.