What is Swiss banking secrecy?
In 1934, the Swiss Banking Act was introduced. Bank secrecy, which already had roots in the 19th century, was an important part of this. It means that banks do not share personal information of their customers with third parties. A bank employee who violates a customer’s privacy faces a severe sanction.
“Switzerland has traditionally had strict banking secrecy, which made it attractive as a haven for tax evasion and corruptly earned money,” says Rabobank economist Wim Boonstra. “That happened from all over the world. You have stories of people driving there with a trunk full of money. This was the situation for a long time, international pressure didn’t do much.”
That changed in 1986, when Philippine dictator Ferdinand Marcos was ousted. There were suspicions that he had stolen billions from the state coffers and stored them in Switzerland. Boonstra: “The US was then able to successfully put pressure on Switzerland. Since then, there have been some cracks in banking secrecy.”
Switzerland eventually signed a treaty with the European Union in 2015. As soon as an EU citizen opens an account in Switzerland, the bank must automatically share it with the tax authorities of the account holder. Such a treaty has also been concluded with many other countries, such as Australia, Canada, Japan and Russia.
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