Merz pledges to defend bank secrecy

Merz is critical of the proceeding Keystone

President Hans-Rudolf Merz says Swiss banking secrecy laws remain intact despite a deal which allows the UBS bank to hand over customer details to the United States.

Merz said the leading Swiss bank had no choice but to settle the case to avoid criminal charges that could have threatened its existence and undermined the country’s economy.

He added the bank admitted to fraud under both Swiss and American law and transferred the names of up to 300 clients to the US justice authorities.

Swiss law prohibits the disclosure of client data unless the authorities find customers committed a serious crime, including tax fraud or money laundering. However, tax evasion is only an administrative offence.

Extending the scope of an accord with the European Union on the taxation of savings income could be a way of preventing the end of banking secrecy, Merz told a news conference on Thursday.

Merz, who is also finance minister, criticised the US for setting a deadline of February 18 for the bank to hand over information, but he denied that the case would sour bilateral relations between Washington and Bern.

Legal proceedings are still underway in Switzerland as part of a bilateral accord between the two countries over cases of suspected tax fraud.

The $780 million (SFr916 million) deal between UBS and the US authorities – approved by the Swiss banking regulator – has come in for strong criticism by political parties and experts in Switzerland.