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