Swiss top court knocks down bid to extend banking secrecy
LAUSANNE: Switzerland’s highest court ruled on Wednesday that prosecutors cannot extend Swiss banking secrecy rules to all corners of the globe to pursue whistleblowers.
In a case drawing international scrutiny, the Federal Supreme Court by a 3-2 majority rejected an appeal by Zurich prosecutors in the case involving former private banker Rudolf Elmer, who denied all the charges.
The Swiss Banking Act requires employees of Swiss-regulated banks to keep client information confidential, but a number of staff have leaked account details to foreign authorities in the past decade as Western governments crack down on tax evasion.
Some lawmakers in the European Union had worried that the prosecutors’ move, if successful, would have deterred potential whistleblowers from supplying information on people accused of shifting their wealth to tax havens through accounts protected by secrecy laws.
Zurich prosecutors had asked the court to interpret the law so that the secrecy obligation is widened to include people with looser working relationships to Swiss banks and their subsidiaries abroad.
They were appealing against the 2016 acquittal of Elmer on charges brought under the secrecy law.
Elmer, who was in the courtroom, expressed relief at the verdict. “It’s a positive one, definitely,” he said.
“It was made clear by the court that Swiss bank secrecy law is not applicable to banks in countries outside of Switzerland. I think that was very clear today and I’m glad it is now clear for all,” his attorney, Ganden Tethong, added.
Elmer, who headed the Cayman Islands office of Swiss private bank Julius Baer until he was dismissed in 2002, later sent documents with details of alleged tax evasion to the anti-secrecy group Wikileaks and to tax authorities across the globe.
Zurich’s upper court ruled in 2016 that the bank secrecy law did not apply to him as an employee of the Caribbean subsidiary, rather than of the parent bank in Zurich.
In their appeal, the prosecutors argued that if they could not apply the law to people connected to Swiss banks outside the country, this deprived banking secrecy of its substance “with far-reaching consequences that cannot be accepted”.
Switzerland is the world’s largest centre for overseas wealth management and in recent years has responded to international pressure, especially from the EU and United States, for greater transparency.
This includes participation in the Automatic Exchange of Information programme.
It was made clear by the court that Swiss bank secrecy law is not applicable to banks in countries outside of Switzerland GANDEN TETHONG
Rudolf Elmer’s attorney