Banks May Guarantee High Levels of Privacy Protection

The Organization for Economic Cooperation & Development's Committee on Fiscal Affairs has approved a report on improving access to bank information for tax purposes, which one of its working groups drew up last year.

The Swiss Bankers' Association (SBA) is satisfied with the content of the report. Since the Swiss legal system conforms entirely with the working group's recommendations, the SBA sees no need to make any change that would affect the protection of the individual privacy of bank customers in Switzerland.

Although the working group has recognized the necessity of protecting bank information from unauthorized invasions of individual privacy, it has identified three areas in which discussion is needed. These are:

• the duty to verify the identity of the contracting party and the beneficial owner of assets;
  
  
• the access that tax authorities can have to bank information; and
  
  
• the exchange of bank information with foreign tax authorities

The SBA has noted that Switzerland already fulfils the report's recommendations. Firstly, it is not possible to deposit money anonymously with a Swiss bank. This is precluded by criminal law, banking regulations and the professional rules of the SBA, which are binding on its members. Furthermore, Swiss banking customer confidentiality rules offer no protection to criminals; nor do they protect anyone committing tax fraud from criminal prosecution. It is irrelevant whether the offence was committed in Switzerland or abroad. Under certain conditions, Switzerland offers foreign states unilaterally the possibility of legal assistance. One of these conditions is the principle of 'double incrimination', whereby the conduct considered to constitute an offence in a foreign country also constitutes an offence under Swiss law. An example of this is tax 'fraud', although this is not the case with simple tax 'evasion'.

The report considers these and other aspects of national legal systems, and recognizes their democratic foundations. According to the SBA, the report therefore requires no substantial changes that would affect Swiss banks and their customers.

For further information on this topic please contact Thomas Keller or Guy-Philippe Rubeli at Pestalozzi Lachenal Patry's Geneva office by telephone(+41 22 80 94 500) or by fax (+41 22 80 94 501) or by e-mail ([email protected] or [email protected]). Alternatively, contact Robert Furter at Pestalozzi Lachenal Patry's Zurich office by telephone (+41 1 217 91 11) or by fax (+41 1 217 92 17) or by e-mail ([email protected]).