Parliament: don’t touch banking secrecy for Swiss clients

Banking secrecy is protected by a 1934 law Keystone

Swiss banking secrecy should not be loosened – at least not for clients within Switzerland, according to the Swiss parliament. An initiative that called for the protection of domestic banking secrecy to be anchored in the Swiss constitution may now be withdrawn. 

The Senate on Tuesday followed the House of Representatives in approving a motion calling on the Federal Council to renounce any tightening of the criminal code for tax offences. 

The organising committee behind the “yes to the protection of the private sphere”, which was handed in in September 2014, said it would decide in the coming weeks whether to withdraw its initiative. 

+ Voters to have final say on domestic banking secrecy

The group behind the initiative – members of the conservative right Swiss People’s Party, centre-right Radical Party and Christian Democratic Party as well as the Association of Small and Medium-Sized Enterprises and the Homeowners’ Association – want to ban the automatic exchange of client data within Switzerland’s borders.  

Domestic law 

In Switzerland, taxpayers must disclose their income and wealth to the tax authorities. However, their privacy continues to be protected as the authorities can only use information for tax purposes, and under most circumstances, not share it with other parties. Banking secrecy is protected by a 1934 law – violating it is punishable by prison.  

Under domestic Swiss law, only tax fraud is a criminal offence, such as deliberately falsifying documents. Tax evasion, for example “forgetting information”, is a civil offence that can incur fines.  

But the subtle distinction between tax fraud and evasion was abolished for foreign clients of Swiss banks in 2009 following international pressure from the United States and the Organisation for Economic Co-operation and Development (OECD).