540 TRANSNATIONAL LAW & CONTEMPORARY PROBLEMS [Vol. 20:539
For decades, Switzerland has been one of the world‘s s taunchest
advocates of the right to privacy in the area of banking secrecy. The Swiss
government has long maintaine d a policy of professional banking secrecy and
has imposed strict penalties on those who violated that confident iality.
result, the Swiss governme nt has historically refused to assist the
governments and tax authorities of other nations in prosecu ting individual s
under suspicion of hiding their taxable wealth in Swiss numbered bank
This policy of sovereign secrecy is changing. On August 20, 2009, the
Swiss government cooperated with the U.S. government in the indictment o f
two Swiss citizens for their roles in assisting Americans in transferring funds
into Swiss banks to avoid detection and taxation by U.S. authorities.
Swiss government‘s suppo rt in these recent prosecutions indicates a
significant shift in Switzerland‘s official policy toward banking secrecy.
The Swi ss g overnment‘s a ssistance, combined with an increased
international effort to shut down tax havens worldwide, is a harbinger of
significant changes in the treatment of international banking secrecy laws in
tax havens. Swiss banks are renowned worldwide for their traditions of
financial protectionism and confidentiality, and other tax havens often mimic
the Swiss system. Therefore, any po licy shift by Switzerland leading away
from their traditional ideals will have a wide-reaching impact on
international financial sys tems, most notably on other tax havens. In light of
both the unified international moveme nt toward the remo val of banking
secrecy and the major tax havens‘ reluctant acquiescence to international
proposals, the policy shift toward more open banking procedures will likely
SWISS FEDERAL BANKING ACT OF 1934, Nov. 8, 1934, art. 47 [hereinafter Swiss Federal Banking
Act of 1934], available at http://www.swiss-banking-
law.com/en/files/KPMG_Swiss_Federal_Act_on_Banks_and_Savings_Banks.pdf (stating that the
penalty imposed for such violations is a maximum of six months in prison or a fine not exceeding
250,000 francs (approximately $250,000 U.S. today)).
See Alison Langley, Swiss Won‟t Yield on Secrecy, Stalling Bank Plan, N.Y. TIMES, Dec. 4, 2002,
available at http://www.nytimes.com/2002/12/04/business/swiss-won-t-yield-on-secrecy-stalling-
bank-plan.html (describing Switzerland‘s intractability in refusing to engage in international
cooperation to pursue tax evaders); see also Swiss Federal Banking Act of 1934, supra note 1
(describing the criminal penalties imposed for violations of banking secrecy); EMBASSY OF SWITZ.
IN THE UNITED STATES OF AMERICA, PROTECTION OF PRIVACY IN FINANCIAL MATTERS,
File.tmp/4.3 Swiss Banking Secrecy.pdf (last visited Feb. 1, 2011) [hereinafter SWISS BANKING
SECRECY FAQ]; Opening a Bank Account, SWISSBANKING: SWISS BANKERS ASS‘N,
http://www.swissbanking.org/en/home/faq-kontoeroeffnung.htm (last visited Feb. 1, 2011)
(stating that accounts in Swiss banks can take the form of ―numbered accounts‖ and that this
form of recordkeeping attaches a number or code, rather than an individual‘s name, to the
account for the purpose of conducting transactions).
Jeremy Pelofsky, Two Charged in Swiss Banking Tax Evasion Scheme, REUTERS, Aug. 20,
2009, available at http://www.reuters.com/article/topNews/idUSN2052384420090820.