Swiss Banking Secrecy

The Swiss banking secrecy is subject to much discussion at the moment and Switzerland is under strong pressure to change the country’s banking secrecy laws. It is easy to say that Switzerland immediately must change their banking secrecy laws since it only protect criminals around the world. But why does Switzerland have such strong bank secrecy and why was the laws in this area once created? There is almost always a good reason (well, a reason anyway) behind laws and of course the Swiss banking secrecy laws are no exception.

Switzerland itself explains that “According to the Swiss conception of democracy, citizens are not here for the State, but rather the State is here for the citizens. Citizens are not primarily taxpayers, but rather free human beings who have a right to privacy. Banking secrecy should be seen in this context. Banking secrecy protects the financial privacy of citizens from unauthorized access by other private persons or also by the State. Banking secrecy does not protect criminals, however: banking secrecy is subject to various legally defined limits.”

One could always argue about how strong secrecy laws should be but the philosophy that the citizens are not here for the State, but rather the State is here for the citizens is something that most of us will be prepared to accept even though in the practical life you have the impression that the situation is quite the opposite.

Switzerland has published a more detailed account for its bank secrecy and the country’s obligations in an international context with exchange of tax information etc. It is definitely worthwhile reading for anyone who would like to get more knowledge in the subject and the complete text can be obtained by clicking the link down below.

Swiss Banking Secrecy according to Switzerland

Update on German Authorities buying information on Germans having hidden money in Swiss Banks Accounts

Since a couple of months ago there have been a lot of fuzz in the media regarding data with information about Germans having undeclared money in Swiss Banks Accounts. The data has been stolen from a Swiss bank and the person who has stolen the information has offered the German state to buy the information.

The German authorities did already in 2008 purchase data stolen from a bank in Lichtenstein and earlier this year the German federal government authorized the state authorities to buy the information, even though it was obtained illegally. Therefore it seemed rather obvious that the states would take the opportunity to hit hard against the tax evasion and on Friday a spokesperson for North Rhine-Westphalia (NRW) said it now had received the information about the bank accounts bank on a CD. How much it has paid for the information was not revealed.

The case has deeply shaken Switzerland’s large private banking industry and Germans hold an estimated 200 billion euros in undeclared funds in Swiss banks. Only in the past months almost 6 000 Germans have turned themselves in to the authorities which is expected to make it possible for the German authorities to recover about 500 million euros of lost taxes.