Switzerland has a federal system of government like that in the U.S. In both
countries, limited powers are granted by the people to the
government, an important protection for privacy and individual rights. In
financial matters, however, Switzerland has a much stronger tradition of protecting
the peoples' interest in privacy.
In Switzerland, banking secrecy is formally defined in Article 47 of the
Swiss banking law. This law, which went into effect in 1935, codified a strong
tradition of confidentiality between Swiss bankers and their customers, akin to
the attorney-client privilege in the U.S.
Switzerland allows governmental authorities access to financial information for
law enforcement, but much less easily than in the United States where disclosure
is mandatory and routine thanks to the Bank Secrecy
Act. Swiss bankers are obliged to assist in investigations of criminal matters,
and they will assist investigations by foreign governments if the crime being
investigated is recognized in Switzerland.
The confidentiality of Swiss banking predates both World Wars, but it has been
challenged by events such as the investigation into hidden Nazi assets and the recent
origin and growth of money laundering as a crime. Swiss financial privacy has also
been challenged by the desire for tax revenue. The Socialist party in Switzerland
has attempted to end financial privacy a number of times, but it has failed.
Swiss Views on Financial Privacy by Franz Blankart, Jean A.
Bonna et Michel Y. Dérobert, Geneva's Private Bankers Association (October 2000)