Open secrets

It’s been a year of turmoil for the normally conservative banking sector in Switzerland, renowned worldwide for its tradition of financial discretion. It looks like secrecy in Swiss financial institutions is not something we can bank on in future. Pressure from the US is increasing and in 2008 it called for the handover of confidential data regarding American UBS clients accused of illegally avoiding taxes. Germany is also calling time on the tradition after its high-profile investigation into alleged tax fraud in Liechtenstein and now the European Commission is proposing new rules for the disclosure of European account details for member states. Switzerland seems poised for change.

Nevertheless, leading partners in Switzerland believe that their clients, and therefore their practices, will not necessarily be severely affected. They point out that, in fact, Swiss tax authorities already have the right to obtain bank information for the purpose of prosecuting tax fraud offences and may pass information to other states in the context of mutual or administrative assistance. ‘There has been a myth in the past as to the nature of banking secrecy in Switzerland,’ one partner says. ‘But every time there is criminal activity, banking secrecy can be waived.’

Indeed, Jürg Luginbühl, head of the corporate and M&A practice at Zurich and Basel-based Vischer, is optimistic about the possible changes. ‘Banking secrecy has always been considered a cornerstone of Swiss wealth management and private banking in general,’ he says. ‘We think it’s an important feature, but not the only one. Switzerland in general has very many interesting features that distinguish it from other locations.’

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