Thursday, March 19, 2009

Swiss bank secrecy - some tightening

Amid all the talk of Swiss bank secrecy disappearing, a correspondent has reminded us that:

"Switzerland increased the punishment for violation of Swiss Bank Secrecy drastically, as of 1st Jan 2009. Bascially, the punishment used to be a max fine of CHF 50,000 and / or a max. six months imprisonment. As of 1st. Jan 2009 it is max fine CHF 250'000 and / or max. imprisonment of 3 years. (The Cayman Islands max. imprisonment used to be, in 2002, up to 12 years for violation of the Confidentialty Law.)

However, the action of the Swiss authorities clearly shows that there is no real intention to lift Swiss Bank Secrecy. It is called being creative now with Swiss Bank Secrecy!!"


The official source for the punisments is here - it's only available in French, German Italian.
For those who are interested, a rough (slightly edited) web translation of the French version says:

A person is liable to a custodial sentence of three years or a fine if they intentionally:
  1. a) in his capacity as an officer, employee, agent or liquidator of a bank, or an organ or employee of an auditing firm, reveals a secret entrusted to him or that he knew by reason of his office or employment;
    b) encourages others to violate professional secrecy.
  2. If the perpetrator acts negligently, it is liable to a fine of 250 000 francs.
  3. In case of recurrence within five years following a conviction entered into force, the penalty is 45 days at least fine.
  4. The violation of professional secrecy remains punishable even if the charge, employment or professional practice has ended.
  5. The provisions of the federal and cantonal legislation on the obligation to inform the authorities and testify in court are reserved.
  6. The prosecution and trial of offenses punishable under this provision rests with the cantons. The general provisions of Penal Code 2 shall apply."
Note that March 25 there is a questioning of bankers in the German Parliament. Commerzbank, Deutsche Bank, UBS will have to answer questions about dubious banking activities.

You can also find a description of some of the intestinal Swiss debates about this in this rough web translation from Swissinfo here.

((Update: the same correspondent emailed us to add:

- violation of Secrecy is, under the rule of law in most countries I know, a civil matter and not a criminal one. The exceptions I know are Cayman, Switzerland and Singapore.
- it is a criminal matter in those countries - so as to threaten employees not to stand up and become whistleblowers
- Switzerland does not have any Whistleblower Protection Act at all
- when (Rudolf Elmer, the Swiss whistleblower) talked to the Federal Tax Authorities in Switzerland and provided them with data what happened, they stated that they could not protect him - and in addition to that, they sent the data to the prosecutor in Zurich to use against him, even though the matter was discussed in the Swiss Parliament.))

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