Swiss Banking Saga Takes Another Surreal Twist?

London, UK - 1st July 2012, 09:35 GMT

Dear ATCA Open & Philanthropia Friends

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

What are the implications of the Swiss banks' collective surrender of 10,000 staff names to US tax authorities? Julius Baer, the fourth largest Swiss bank, has already handed over 2,500 names of employees, former employees, external asset managers and lawyers who may have helped American citizens evade taxes as "client advisors". In addition to providing personal information about their staff to the US tax authorities, Julius Baer is said to have made available all manner of personal documents, messages, emails and details of telephone calls etc. HSBC and Credit Suisse have also handed over thousands of such names along with other banks in Switzerland on the radar of the US tax authorities. Why? Such client advisors' personal information now makes it possible for US tax authorities to find out the names of tax-evading Swiss bank clients whose identities are supposedly protected by Swiss bank secrecy laws.

Swiss Banking Saga Takes Another Surreal Twist?

Travel Bans for Swiss Bankers

As a result, Swiss private banks have started to ban their top executives from travelling abroad, not only to the US but even to neighbouring France and Germany, because of fears they will be detained as part of a global crackdown on banking secrecy. In parallel, Switzerland has also issued warrants in recent months, which accuse several German civil servants of industrial espionage for buying the Swiss bank details of German tax evaders.

11 Banks in Switzerland on the US Radar

At least 11 banks based in Switzerland are on the radar of the US tax authorities for helping wealthy American clients evade taxes including Swiss cantonal banks and three Israeli banks with a Swiss presence. The list of banks includes Credit Suisse (and Clariden Leu), Julius Baer, HSBC, Basler Kantonalbank, Zuercher Kantonalbank, Wegelin & Co, Bank Leumi Le-Israel, Bank Hapoalim, Mizrahi-Tefahot Bank, Liechtensteinische Landesbank and Neue Zuercher Bank (NZB). The oldest private bank in Switzerland -- Wegelin -- has already collapsed under the pressure of summons issued in New York against some of its high-level employees in January this year.

Criminal Complaints and Civil Cases: Violation of Swiss Law?

Well informed top lawyers, who are distinguished members of the ATCA 5000, inform us that what has happened in regard to the handover of employee names by Swiss banks to tax authorities is a violation of Swiss law. Why? Such a procedure of handover goes against Swiss constitutional rights, the Swiss criminal code and Swiss privacy laws. A criminal complaint against this procedure has already been filed on behalf of the former chief legal counsel at HSBC against HSBC's officers and board. Further criminal complaints are likely to be filed next week and civil cases within a fortnight. Switzerland, under pressure from other countries, is beginning to ease its bank secrecy laws and to accept international standards on tax transparency.

Key Questions

1. What are the ramifications of the surrender of so many thousands of staff names by Swiss banks?
2. Is this an unusual assertion of trans-national reach in the pursuit of law enforcement by US tax authorities?

ATCA 5000 References

1. What Really Happened To The Oldest Bank in Switzerland? Wegelin: Death Throes of Swiss Banking Secrecy & Asymmetric Risk to Swiss Banks - 1st Feb 2012;
2. Eleven Offshore Banks On The US Radar: What Happens Next To Swiss-Based Private Banking? 12th Feb 2012;
3. Switzerland's New Controls for Runaway Alternative Investments, Shadow Banking & Tax Avoidance Schemes? 15th April 2012; and
4. Switzerland: The End of Banking Secrecy? Comment & Interview - 3rd May 2012.


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