Switzerland, and its lesser known neighbour Liechtenstein, are famed for their secret bank laws. Having “swiss bank account”, has always been portrayed in the movies and popular culture as a symbol of wealth and anonymity, and rightly so.
For generations the Swiss have protected the data, privacy, and money of their customers, from bankers to Nazi’s; they have kept the same level of secrecy.
This has often allowed people to use Switzerland as a tax haven. While tax fraud in Switzerland is illegal (and they will assist in an investigation into that), there is a far tighter definition of this than others would hope for and tax “avoidance” certainly is not a crime in Switzerland for this reason getting data on the clients of Swiss bankers has always been problematic.
But now ,as the recession starts to really hit the US economy, it appears that an extra billion here or there is increasingly important and pressure is being applied to Switzerland and Liechtenstein to get hold of this money.
While Liechtenstein will maintain banking secrecy as a “legitimate pillar of our understanding of citizenship and the law…..This will only be possible by taking a cooperative approach”
On 18th February 2009 the Swiss bank UBS provided the details of over 200 customers to the US tax authorities, IRS, as UBS and the US came to an agreement on secrecy and tax investigations; UBS also had to pay a fine of $780 million.
The decision to release the details seems to have come from the Swiss government as the Swiss Financial Markets Supervisory Authority (FINMA) ordered UBS to reveal the account details of customers targeted by the US justice investigation. This is such a big step it also effected the Swiss franc, which dropped in value on the news.
The Swiss Finance Minister, Hans-Rudolf Merz, tried to calm the market and stated that: “It is evident there has been tax fraud [at UBS] … [but] bank secrecy will stay”
However on 20th February 2009, just a day later, the US filed more suits against UBS for another 52,000 details.
Is the age of banking secrets comming to an end?