NCJ Number
56988
Date Published
1978
Length
14 pages
Annotation
THE RELATIONSHIP BETWEEN SWISS BANK CONFIDENTIALITY AND WHITE-COLLAR CRIME IS EXPLORED.
Abstract
SWITZERLAND IS THE ONLY COUNTRY WITH A CONFIDENTIALITY RELATIONSHIP BETWEEN BANK AND CLIENT SIMILAR TO THAT BETWEEN DOCTORS OR LAWYERS AND THEIR CLIENTS. BANKS ARE NOT ALLOWED TO REVEAL INFORMATION OBTAINED THROUGH PROFESSIONAL ACTIVITIES, AND VIOLATIONS ARE PUNISHABLE BY LAW. THE 1934 LAW WAS ORIGINALLY DESIGNED TO PROTECT INDIVIDUALS' PROPERTY FROM CONFISCATION BY TOTALITARIAN REGIMES, AN OBJECTIVE STILL CONSIDERED NECESSARY TODAY. AT THE SAME TIME BANKS MUST SUPPLY INFORMATION FOR CRIMINAL PROCEEDINGS. FURTHERMORE, CONTRARY TO POPULAR BELIEF, THE BANK MUST KNOW THE IDENTITY OF ALL ACCOUNT HOLDERS, EVEN FOR NUMBERED ACCOUNTS. IN THE CASE OF TAX EVASION, HOWEVER, INFORMATION MAY BE RELEASED ONLY TO THE TAXPAYER, NOT TO THE STATE; NOR MAY INFORMATION ABOUT FOREIGN EXCHANGE VIOLATIONS BE DISCLOSED. MOREOVER, INFORMATION SHOULD ONLY BE RELEASED IN CRIMINAL PROCEEDINGS WHEN THE INFORMATION IS CLEARLY RELEVANT. INFORMATION BEARING ON POLICE CASES AGAINST UNKNOWN PARTIES IS PASSED ON TO THE POLICE ONLY AT THE DISCRETION OF THE BANK. AN ACTIVE ROLE OF THE BANKS IN PREVENTION OF WHITE-COLLAR CRIME IS PROVIDED FOR IN THE 1977 BANK AGREEMENT WITH THE SWISS NATIONAL BANK REQUIRING THAT BANKS REFUSE TO ACCEPT FUNDS FROM ILLEGAL ACTIVITIES SUCH AS TAX EVASION OR TO ASSIST IN BRINGING ABOUT FLIGHTS OF CAPITAL, ALTHOUGH IT IS FREQUENTLY DIFFICULT TO ASSESS WHETHER FUNDS DERIVE FROM LEGITIMATE SOURCES. PREVENTIVE MEASURES AT THE BANKING LEVEL ARE USUALLY INEFFECTIVE, E.G., A BANK'S REFUSAL TO DEAL IN EXOTIC STOCKS DOES NOT PREVENT THEIR BEING TRADED, BUT A REPUTABLE BANK WILL NOT LEND ITS NAME TO DUBIOUS UNDERTAKINGS. THE PRINCIPLE OF BANK CONFIDENTIALITY IS AN ATTRACTION OF SWISS BANKING, BUT ITS SIGNIFICANCE SHOULD NOT BE EXAGGERATED. NOTES ARE SUPPLIED. --IN GERMAN. (KMD)