DecryptionsArticle 47 of the banking law, which made the country a financial haven, was extended in 2014 to actors other than bankers, threatening whistleblowers and journalists.
It is rare that the prosperity of a country rests on a single article of law. This was however the case of Switzerland, which built its fortune on section 47 of its banking law. Introduced in 1934, this provision establishes banking secrecy as an inviolable principle: any Swiss banker who ventures to reveal information about one of his clients is liable to criminal prosecution which may go as far as imprisonment. It is thanks to this rule, of a severity then unequaled among developed nations, that Switzerland has built its reputation as a financial haven, beyond the reach of tax and judicial authorities around the world.
“Switzerland Secrets”: An Investigation into Suspicious Credit Suisse Clients
“Switzerland Secrets” is a collaborative investigation based on the leaking of information from more than 18,000 bank accounts administered by Credit Suisse from the 1940s until the end of the 2010s. This data was transmitted by an anonymous source, a little over a year ago, in the German daily Suddeutsche Zeitungwho shared them with forty-seven international media, including The world and the Organized Crime and Corruption Reporting Project or OCCRP investigative consortium.
These data were combed through by 152 journalists from thirty-nine countries. They also interviewed former bank officials, as well as regulators and anti-corruption magistrates, and analyzed multiple court files and financial statements. The person behind this leak wished to remain anonymous, but agreed to explain his motivation: to denounce the effects of Swiss banking secrecy on the international community. According to this anonymous source, “the pretense of financial privacy protection is just a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders”.
Tolerated for nearly a century, Swiss banking secrecy has nevertheless ended up bearing the brunt of tax evasion and money laundering scandals, facilitated by the opacity of the Swiss financial centre. The United States opened the breach in 2013, with its extraterritorial law Fatca (Foreign Account Tax Compliance Act), which forced Swiss banks to be transparent about the assets of their American customers. Under pressure from the great powers, Switzerland then agreed to submit to international tax data exchange rules: since 2018, it must automatically inform the tax authorities of the country of origin of foreign customers of the existence of their accounts. in Switzerland, to discourage tax evasion. A gesture of goodwill that enabled the country to come out in 2019 of the list of tax havens drawn up by the European Union.
However, the Swiss Confederation has not completely renounced this culture of secrecy, which remains one of its “competitive advantages” in the global economy. This is what motivated the anonymous source of “Switzerland Secrets” to leak the confidential data of Credit Suisse to the press. “This situation fosters corruption and deprives developing countries of much-needed tax revenues. They are the ones who suffer the most from this reverse Robin Hood operation”writes the source, in a statement to the media partners of the investigation, judging “Swiss banking secrecy laws (…) immoral”. In fact, while most of the major powers have signed agreements for the automatic exchange of information with Switzerland, around a hundred countries still do not have the right to inspect the Swiss safe.
Up to five years imprisonment
The cult of secrecy is also measured by the fear of the Swiss financial center in the face of the possibility of an “information leak” such as “Switzerland Secrets”. These “leaks”, which reveal the identity and assets of rich and powerful clients attracted by the discretion of the country, are the great nightmare of the financial center. Switzerland had already been scalded by the leak of bank data from UBS in 2008. The leak, a few years later, of HSBC listings stolen by former computer scientist Hervé Falciani and handed over to the French authorities before landing in the columns of newspapers, convinced Switzerland to strengthen its repressive arsenal in order to deter violations of banking secrecy. In 2014, article 47 of the banking law was strengthened to severely punish – up to five years’ imprisonment – anyone who transmits confidential banking information to a third party.
You have 34.37% of this article left to read. The following is for subscribers only.