Tradition of Secrecy in Swiss Banks Threatened by Disclosure Requirements
Strict privacy laws have made banking an essential pillar of the Swiss economy. However, new treaties designed to prevent tax cheating through the use of offshore accounts are threatening the tradition of secrecy in Swiss banks. This has created upheaval within the industry. It is also raising concerns among U.S. taxpayers that money kept in offshore Swiss accounts may not be as safe, or as secret, as it used to be.
With increased pressure on Swiss banks to provide information to the U.S. government, taxpayers need to understand the significant risks of a failure to disclose offshore accounts. There are opportunities to come forward and report accounts being held offshore to limit penalties and you also need to consider whether voluntary disclosure is the right choice if you have foreign accounts. An experienced Washington DC tax law attorney can provide you with the assistance you need to make an informed choice and to do everything possible to protect your assets.
Tradition of Secrecy in Swiss Banking Challenged by Disclosure Obligations
Switzerland is among the 60 nations that have signed a treaty designed to unmask wealthy clients shielding their funds from local taxes by having offshore bank accounts. However, the New York Times indicates that Swiss authorities are merely “nodding at cooperation with frustrated governments abroad.”
Since 1934, Swiss laws have made it a crime to violate confidentiality and have required bankers in the country to guard the secrecy of their clients just like priests and lawyers do.
This puts bankers in a tough spot, since American authorities have begun charging bankers and financial advisors in Switzerland with facilitating tax evasion. Bankers who cooperate with these U.S. officials violate the “duty of absolute silence,” required by Swiss law. This could potentially lead to consequences like ostracism from colleagues, or worse. Home raids, fines for violations and industrial espionage and prison are potential consequences when a Swiss banker turns over information to the U.S. authorities.
Yet, despite these risks, the pressure from American authorities has resulted in a great deal of information actually being turned over. Swiss banks have brokered a deal in which hundreds of employee names will be provided to the United States Justice Department. In exchange for giving their employee names to the DOJ, the banks will be safe from prosecution.
Bankers in Switzerland reportedly feel that they are being “pressured to take the fall for more powerful superiors,” and are resorting to drastic measures like carrying laptop computers that are formatted to wipe information with a few keystrokes. Carrying separate paper lists, one with coded numbers and one with coded names, is also a tactic that has been used to help protect the privacy of American consumers using Swiss banks.
The pressure, however, is only likely to increase as further global efforts are made to fight tax evasion. If you have funds in a Swiss bank account or other offshore account, you do not want to be caught up in the conflict between U.S. laws and Swiss privacy protections. You need to talk to Kevin Thorn, Washington DC tax attorney at Thorn Law Group about your options.