Says Sebastien Guex – professor of contemporary history at the University of Lausanne, one of the few Swiss intellectuals who has ever written about the origin of banking secrecy – that already at the dawn of the twentieth century, Swiss bankers dispensed maximum discretion to their most important clients. For this reason, Switzerland also became an attractive pole for the rich bourgeois of France, Germany and Austria (few Italians at the time). “Between 1906 and 1907 the French government had already taken steps to obtain from the governments of Switzerland, Belgium and Great Britain what is now called the Automatic Exchange of Tax Information,” says Guex. The Common Reporting Standard (Crs), this is the acronym of today’s system shared within the community of OECD countries, was introduced in Switzerland only in 2018. It allows the tax authorities of the adhering countries to exchange standardized taxpayer data, so that can conduct asset checks. In fact, it is the means that abolishes banking secrecy. At least for taxpayers residing abroad. Banking secret whose violation has been punishable by law for almost a century: in 1934, under pressure from the Swiss banking environment, the confederation introduced its banking law. Article 47, explains Professor Guex, is the most important: “It says that all employees, directors or owners of a bank who transmit information about the credit institution’s customers are committing a crime.” The penalty is up to three years and the State, as the protector of the good of secrecy, can proceed ex officio. Two years after the introduction of the law, the penal code was also reformed to introduce the crime of banking espionage. “At that point, banking secrecy is truly protected from a legal point of view and becomes a public good in Switzerland – explains Guex -. To my knowledge, this is the only government that, before the Second World War, adopted legal provisions to protect banking secrecy ». This system, according to Guex, has created “a culture of banking secrecy, internalized by bank employees or, better said, by a large part of Swiss society”.
Violations of the rule of secrecy are few, but significant. Hervé Falciani, a former employee of the Swiss headquarters of HSBC, had given about 2 thousand names of potential tax evaders to the then French Finance Minister Christine Lagarde in 2008. The Lagarde List is a subset of the Falciani list, containing 120,000 names. From there the collaborative investigation of Icij SwisLeaks was born. Falciani was then sentenced to five years for industrial espionage and violation of banking secrecy in 2015. Also from 2008 is the Vaduz list, a CD-ROM with 388 names of alleged tax evaders in Liechtenstein. In Italy, in 2009, the Guardia di Finanza of Milan discovered on the computer of the Swiss lawyer Fabrizio Pessina a list of important clients with their assets hidden abroad. He had a company in Switzerland from which he built trust companies and shielded companies in various tax havens. In December 2013, the Milanese Guardia di Finanza also found the list of about 13,000 Credit Suisse clients who had taken out false insurance policies between Liechtenstein and Bahamas. The bank has negotiated, but for many customers the situation is uncertain, so much so that many policies are not even found.
As long as there is Article 47, banking secrecy will have its safe conduct. Although Switzerland has entered into collaboration agreements with the tax authorities of over a hundred countries and has adopted the common standard in the exchange of information, its past does not entirely pass. For Swiss citizens and residents of Switzerland, the confidentiality of current accounts is still protected. From Guex’s point of view, the fact that account holders of Swiss banks with assets above € 50 million have grown since 2015 shows that Swiss wealth management services are increasingly targeting a specific slice of the market. And this goes hand in hand with a greater possibility of granting residency and citizenship: “A first way to keep banking secrecy works is to transform the most important customers into Swiss citizens.” “What holds the Swiss people together, so different in terms of values and languages, is the franc. The richness. And to maintain the status quo, the Swiss have been led to believe, banking secrecy is needed, ”concludes the professor.
It was a long and bumpy path for Switzerland to get to the adoption of the following in 2018: “If you were to teach retarding combat at the university, you should take Swiss diplomacy as a model”, comments Paolo Bernasconi, lawyer, former magistrate, father of Swiss Money Laundering Act of the 1990s. Delayed combat is a defensive technique: it means reacting to attacks in order not to lose positions.