Senate vote lays groundwork to end banking secrecy

Outgoing finance minister Eveline Widmer-Schlumpf consults her notes before advising during Wednesday's Senate debate on the automatic exchange of information Keystone

The Swiss Senate has sealed the end of banking secrecy for foreign clients, following the House of Representatives in accepting the legal groundwork for the automatic exchange of information. 

The decision paves the way for a “decorous funeral for tax secrecy,” as senator Roberto Zanetti of the leftwing Social Democrats put it, encouraging acceptance of that fact “with neither loud lamentations nor loud hurrahs”. 

On Wednesday, the Senate followed his advice by accepting the framework for automatic data transfer without further debate, with only four votes against, all from the conservative right Swiss People’s Party. 

Currently, Switzerland sends data about tax evaders to foreign governments and institutions upon request only. However, the latest decision by the Senate makes it possible for such information to flow automatically to certain countries, among them Australia and the 28 European Union nations, with whom Switzerland has already concluded automatic exchange agreements. Switzerland has already signed a similar information exchange deal with the United States – the Foreign Account Tax Compliance Act (FATCA).

Those agreements make up part of Switzerland’s commitment to share foreign clients’ account data with other countries by 2018 as part of a new system designed by the Organization for Economic Cooperation and Development. 

The agreements with individual countries will have to be ratified separately by parliament, but Wednesday’s decision lays the legal groundwork for them and others to be accepted. The decision does not affect banking secrecy within Switzerland for Swiss citizens – that issue will be debated more intensely in conjunction with a people’s initiative aimed at preserving privacy for people living in Switzerland.