Switzerland (GenevaLunch) - Swiss banking secrecy, tax evasion, offshore banking versus tax havens: the old clashes between Switzerland and its neighbours as well as the US, are making headlines again. Last week front page stories covered Barack Obama’s voting record on tax havens, but this week the news is Tages-Anzeiger’s revelation that a small number of entirely Swiss-Swiss bank transactions, in Swiss francs, are accessible to the American CIA.

Monday’s newspaper report quotes a spokesperson for SIx Group, which owns SIC, the company that handles inter-bank transactions in Switzerland, as saying that one server, part of the Swift international bank transactions system, is in the US and can therefore be accessed by the US government. This server handles some Swiss franc transactions between Swiss banks, but it is less than 1% of all internal Swiss bank payments, he notes.

His remarks contradict Swiss government and banking authorities who in August 2007 said that banking transactions in Swiss francs were not part of the Swift international system, reports RSR, and therefore could not be seen by other governments. The government noted in 2007 that more measures were needed to protect data, since “the fact that the US administration was able to inspect the transaction data poses the problem of transferring data to a country that does not offer an equivalent level of data protection.” It also said there was a need to take steps to ensure that Swiss banks inform their clients of the danger of data being stored outside the country, which they had failed to do.

In 2006 the US government acknowledged that it had been monitoring Swift records at the Brussels-based organization for five years, including Swiss transactions. The information triggered an outcry in Switzerland and the federal data protection minister accused banks of being negligent for not informing their clients.

Switzerland actively participates in investigating tax fraud, when asked to, by foreign judiciary bodies, but it does not help investigate tax evasion, which is not a major crime in Switzerland. In recent months this has been a sore point with Germany, which is actively pursuing wealthy citizens who place their money abroad without informing tax authorities.

Related stories:

• “Undeclared money global problem,” GenevaLunch interview with Philip Marcovici, international tax specialist, 8 July 2008
• “Swiss money transfers spied on by US government,” 26 June 2008, GenevaLunch

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