Swiss banking secrecy has come under fire recently because of the media focus on UBS, Credit Suisse and their US clients. With the volume of news dedicated to the subject you could be forgiven for thinking that bank secrecy in Switzerland is a thing of the past, that Switzerland has handed over the keys to the castle, defeated.
Most media would like to suggest that some great development has occurred and their output reflects this, but if you take a second look you will find that relatively little has actually happened.
The IRS has been campaigning since last July to prize open details of US account holders at UBS and what has it got to show for it? Out of a suspected 52,000, just 12 names have been promised them. Even these 12 aren’t for sure, because they still have the right to appeal the decision under Swiss law.
Of course its in the interest of the US government to keep this issue in the news because it gets people scared about using offshore accounts, and may even result in some UBS account holders handing themselves over . Tax Lawyers too have a field day letting it be known that they are the only solution for these luckless UBS types. Bu is it not just a case of smoke and mirrors concealing the fact that, despite everything, Swiss bank secrecy hasn’t changed, and violation of the law still carries a prison sentence?
UBS and Credit Suisse have made themselves targets by opening offices in the US and therefore making themselves subject to US law. The Swiss Federal Council simply
acknowledged that when it agreed to allow the US Customer information to be
given to the IRS. For those banks without a US presence there has been no operational change – Switzerland will still put people in jail for violating bank secrecy.
In fact private banks and trust companies have been reminded by authorities that they will be prosecuted if they violate the Secrecy Act.
It is no more in Switzerland’s interest to start unraveling client confidentiality than it is in the interests of those American UBS clients to have their personal details revealed. Although it may have to walk a fine line in order to keep the US from swallowing it whole, bank secrecy remains intact and there are no plans to change it.