Banking

Switzerland

Switzerland remains one of the most important banking centers in the world. It has a long history and tradition of financial privacy, which can be traced back to the Middle Ages. The Swiss Constitution, the Banking Law, and the Penal Code provide a solid legal foundation for maintaining the strict standards of confidentiality.

As a practical matter, Swiss banks and their employees do not disclose information except by direct judicial order. This practice applies to requests for information by individuals, foreign governments, the Swiss government, and to other banks. An employee who even acknowledges the existence of an account is in violation of the law.

Cooperation in Criminal Matters

In recent years, there has been a shift in the absolute secrecy policy in response to international pressures from the U.S. and other countries. In cases which involve requests for information from foreign governments concerning a serious criminal offense, the Swiss may cooperate in supplying the requested bank records. The foreign government must first show that a particular individual committed one of the enumerated crimes, which is also an offense in Switzerland. It must then present evidence that the individual has used an identified bank for transactions, which are associated with the crime. If the proof is determined to be satisfactory, the bank will be required to turn over records regarding the specific transactions involved. Account records not related to the transactions will not be disclosed.

Consistent with this new spirit of responsiveness but much to everyone’s surprise the Swiss Government froze the accounts of exiled Philippine dictator Ferdinand Marcos and deposed Haiti ruler FranÐ"§ois "Papa Doc" Duvalier when the new governments began an effort to retrieve looted funds, which had been stashed in Switzerland. The official policy of the Swiss banks is now to refuse deposits from political leaders when the source of the funds appears to have been illegal or corrupt practices.

This increased cooperation regarding criminal matters has not been extended to civil cases. Disclosure of account information is still prohibited in all civil matters including divorce, lawsuits, and creditor claims. Swiss law also does not permit the disclosure of bank information to foreign tax authorities, including the Internal Revenue Service. Tax evasion is not a criminal offense in Switzerland and is not subject to the exclusion from secrecy of the specified crimes.

Advantages of Swiss Accounts

For reasons apart from bank secrecy, Switzerland provides a number of significant advantages. The banks provide the finest level of service available anywhere in the world. Bank personnel are justifiably famous for their knowledge and experience. The banks offer a broad range of services including securities brokerage and portfolio management. The location in the heart of Europe is convenient, the infrastructure and communication facilities are among the best in the world, and the political and social systems offer unparalleled stability.

Forms of Swiss Ownership

Swiss accounts are often held in the name of a corporation. The corporation can be formed in any part of the world and need not be a Swiss company. For example, it is not uncommon to form a corporation in the British