The Swiss Banking Secrecy: Ubi Abscondis?

The Swiss Banking secrecy:
Ubi abscondis?
"Why does Switzerland's decision in 2009, to cooperate
with other states in case of fiscal evasion, mark a turning
point in its history of Swiss banking secrecy?"

Bachelor thesis in International Relations
under the direction of Prof. Dr. Mary O'Sullivan (Harvard University)
Aadil Attia
Academical year 2011-2012

2
Content
1. Introduction 3

2. Early stages
2.1 What happened? 6
2.2 National context 8
2.3 International context 11

3. Towards and at the end of World War II

4. Recent quarrel

5. Conclusion 36

6. Bibliography 38

7. Annex 42

3
1. Introduction
The global economic crisis in 2008 created the context for a conflict between the OECD states
and Switzerland in 2009.
1
At the global conference of the G-20 in 2009, Peer Steinbrck, the
German finance minister, called for the suppression of "tax oases". Moreover, the Germans
and the Americans were threatening to put Switzerland on a "black list" if Switzerland didn't
improve its information exchange in the financial sector. According to Steinbrck, "this black
list represented the cavalry in Fort Yuma which can be ridden out, but doesn't have to. The
Indians would only have to know that it exists."
2
He was trying to make clear to Switzerland
that not all kind of behaviour on the international level would be accepted from now on and
severe measures could be taken.
This statement made by the German financial minister is one of the attacks launched against
Switzerland's policy in international fiscal matters. Switzerland has been the target of
different types of challenges from other countries. These attacks had started before the Swiss
banking secrecy's formal codification in 1934. In 2009, Switzerland decided to cooperate very
broadly with states in especially fiscal matters with other states. This decision in 2009, is
regarded as a key event in Swiss banking secrecy's history which has influenced and changed
Switzerland's policy in terms of cooperation in fiscal matters with other states.
3

This "historical decision" as Janick Marina Schauffelbuehl calls it, has changed Switzerland's
policy in fiscal cooperation matters, as for a long time Swiss federal authorities refused to
cooperate with any state on any kind of information exchange. This refusal was reflected in

1
WESPI. 2009. p.41
2
ARD. Tagesschau. Die Wut der Schweizer ber Peitschen und Kavallerie. Published on the 04.08.2010 [online]
3
SCHAUFFELBUEHL. 2010. p.46

4
the withholding of information about funds, accounts, and property which customers did not
declare in their home country.
4

This Bachelor thesis aims to analyze three important events, in which the Swiss practice of
banking secrecy has forced the Swiss state to act, as this practice has created situations upon
which other states attacked the Swiss banks. First of all the Paris affair, an event in 1932
which created an internal scandal in France and caused trouble between France and
Switzerland, will be analyzed. Second, I will discuss the conflict between Switzerland and the
Allied Forces towards the end of World War 2, which involved the search for looted funds in
Switzerland and other issues. Finally, the third part will analyze the recent quarrel in 2009. In
each case, I analyze the international context as well as the national context in Switzerland by
addressing Switzerlands attitude towards other states. The reason why I have particularly
chosen these three events is that firstly, they have some characteristics in common such as one
or more states attacking Switzerland's banking secrecy. Secondly, all three events involve
similar Swiss national actors (such as parties, private bankers, ...), which makes it easier to
compare the three events. However I chose three events, which differ in time. The Paris affair
is chosen, as the affair and its consequences lasted from 1932 to 1937 (so, during two World
Wars) and because the Swiss Banking secrecy was formally codified in the same period. The
second case is chosen, as it happened just at the end of World War 2, thus during a period in
which the world was starting to divide into two blocks (East and West). The third event in
2009 was chosen as it occurred after the collapse of the Communist bloc in 1989 and is
considered as a key event by the existing literature.
5
The main question I will address, based
on a historical comparison of these three events is, why Switzerland decided to cooperate in
cases of fiscal evasion in 2009 whereas it had refused to cooperate in the past.

4
BESSON. 2004. p.27
5
SCHAUFFELBUEHL. 2010. p.46

5
The hypothesis to the questions above, should be found on the international level, as
Schauffelbuehl has argued but a more significant part of the answer will be found on the
national level. So far Schauffelbuehl has argued that the international coordinated efforts of
states in 2009 compulsed Switzerland to concede. I will argue that this coordination was due
to the collapse of the bipolar system (after 1989) and allowed states to take a unanimous
decision against Switzerland. On the national scale, I will argue that political procedures in
the Swiss political system forced Switzerland to change its policy in 2009.
From a methodological point of view, newspaper articles, interviews effectuated by
newspapers and communiqus by the Swiss banking association and other actors will serve as
a basis to illustrate the debate on the Swiss Banking secrecy as it does not always take place
in a forum (e.g. Parliament) where opinions are exchanged directly.
A comparable work has been done by Janick Marina Schauffelbuehl in the sense that she
analyzes different events in the past and tries to show what is different in 2009 to previous
events. She adopts an international approach but limits herself to Franco-Swiss relations and
also neglects the national context (with its micro scale focusing on interest groups and
individuals), to analyze her selected events.
This is why the scientific value of this dissertation lies primarily in the fact that no
comparable work has focused on a historical comparison of those three events taking into
account the international context (e.g. factors and constraints) as well as a national dimension,
as the state's decision is an aggregate of individual choices and interest groups,
6
and therefore
should be part of a historical analysis.

6
ALLISON / ZELIKOW. 1999. p.391

6
2. Early Stages
2.1 What happened?
In October 1932, the Basler Handelsbank (Basel Commercial Bank) received international
attention due to an event which is called or known under the name of "Paris affair" or in
French terms "fraudes fiscales Paris".
7

Two French policemen arrested a director, vice-director and another responsible of the BCB
in an apartment in Paris. The three men were paying dividends to French customers who had
not declared those revenues to the French tax authorities. On top of that, the police found a list
of 1000 to 2000 French citizens' names
8
with an additional 65 phone numbers and some
notes.
9
The event attracted a great deal of international attention because the sum which was
deposited on Swiss accounts was so large, amounting to two billion French Francs in total
which corresponded to around 20% of Switzerland's net national product at the time.
10

In other words, two billion French Francs had not been declared to the French tax authorities.
This figure which was mentioned by the French socialist Fabien Albertin on the 10
th
of
November in 1932 during parliamentary debates
11
, is contested. Vogler says that: "where
[Albertin] found the information to substantiate these claims remains a mystery."
12
He also
mentions that the number Albertin cited had to be a high number (implying a high percentage
of tax revenue which was lost to French authorities), as Albertin was trying to "make
domestic political capital"
13
. Additionally, France had lost national revenue which would have

7
VOGLER. 2006. p.19 and PERRENOUD / LPEZ / ADANK / BAUMANN / CORTAT / PETERS. 2002. p. 240
8
for the number of names on the list compare literature as it does not agree: VOGLER. 2006. p.20 and RAPPO.
2002. p.22 and PERRENOUD / LPEZ / ADANK / BAUMANN / CORTAT / PETERS. 2002. p.240 and BESSON. 2004.
p.27
9
PERRENOUD / LPEZ / ADANK / BAUMANN / CORTAT / PETERS. 2002. p.240
10
RAPPO. 2002. p.22 and VOGLER. 2006. p.22
11
JOURNAL OFFICIEL DE LA RPUBLIQUE FRANAISE. Session of 10
th
November 1932. p.2997 ff.
12
VOGLER. 2006. p.22
13
Ibid. p.94

7
been coming from the funds deposited in Switzerland which France was in need of after the
First World War.
In November 1932, the affair created a national debate within France. During a heated
discussion within the French Parliament, one of the socialist party members revealed the
names of the tax dodgers. Amongst those were two Bishops, several generals, the owner of
the newspaper "le Figaro", twelve senators and one ex minister and industrials such as the
brothers Peugeot.
14
The mention of the individuals involved shows that not only private, but
even government officials were implicated in the process. As France actually did allow the
placement of funds in other countries as long as they were declared to the French tax
authorities, this made government officials less credible.
15

Besides creating a short term withdrawal of French capitals from Switzerland (which was
soon reversed in 1936)
16
the arrest led to a diplomatic and political crisis between France and
Switzerland. The credits of Swiss banks in France were (frozen) of which 80 million Swiss
Francs belonged to the Basler Handelsbank alone. Different figures regarding the amount had
been mentioned in the press. The figure which was cited the most was 200 million Swiss
Francs but Guex says that the amount was probably at least 400 million Swiss Francs.
Considering both figures, at least 20 % to 40 % of the Swiss banking sector's capital in France
was blocked, which is a considerable amount, as Switzerland had close economic ties with
France.
17
Two Swiss Bankers were retained in France during several months in order to
increase pressure on the Basler Handelsbank "to force it to lift banking secrecy"
18
and a
demand of bilateral judicial cooperation was put forward to Switzerland by France on

14
Literature does not agree on constellation of tax dodgers: BESSON. 2004. p.26-27 and RAPPO. 2002. p.22
15
VOGLER. 2006. p.20
16
Ibid.
17
GUEX. 2000. p.247-256 and PERRENOUD / LPEZ. 2002. p.67-70
18
Ibid.

8
November, 21
st
1932.
19
Besides these facts, the Swiss embassy in Paris informed Berne in
December 1932 that espionage actions were taking place by the French government's secret
service.
20

2.2 National context
When in 1931, a Swiss bank went bankrupt, another only survived due to massive help of the
Confederation and four more had to be reorganized substantially (out of eight Swiss banks
existing in total), voices were raised asking for change. In the middle of 1931, the worker's
movement (represented by the socialist Party), wide sectors of the farmers (represented by the
Swiss farmers' union) and the middle classes demanded more control over the financial sector.
Mainly, these groups wanted two things. Firstly, they were asking for tighter control over
banking activities, in order to protect the assets of lower and middle classes. Secondly, they
asked for a restriction of capital export in order to fight the high interest rates, which had been
caused by the growing amounts of capital being invested abroad.
21

The Swiss government had been cautious for a long while but finally gave in due to the
political pressure of the groups and the difficulties faced by the financial establishments.
22

The discussion on the Paris affair in Switzerland itself started in 1933 when Alphonse Dunant,
Swiss minister in Paris said that the bankers had been imprudent at this occasion (referring to
the Paris affair). All of a sudden, all banks participated in any kind of discussion, the Federal
Council or the Swiss National Bank were having with the French authorities. The Swiss Bank
corporation adopted its organization to maintain their relations with French customers.
William Schwartz for example was appointed by the Swiss Bank Corporation to represent the
interests of the Swiss Bank Corporation. He held discussions with Mr. Barthelet who was in

19
GUEX. 2000. p.247-256
20
BESSON. 2004. p.27 and GUEX. 2000. p.247-256
21
GUEX. 2000. p.243-244
22
Ibid.

9
charge of the fiscal inquiries in France against Swiss banks. Schwartz, did not only explain
the whole situation to Barthelet but they became friends. Then, Barthelet promised to inform
Schwartz in advance, about any possible measures which the French tax authorities would
take in the future against the Swiss bank corporation. So, while the Basler Handelsbank was
suffering from the loss of clients and fearing sanctions from the French authorities, other
banks took advantage of this situation.
23

In January 1933 the Federal council decided to draft a Banking Law. A first version which
was outlined in February 1933 included an article on the Swiss banking secrecy. This bill (on
the Swiss banking secrecy) was changed during the preparliamentary and parliamentary
phases. However it passed into law in November 1934. Guex says that "[...] it is important to
note that, during this entire period, the article dealing with banking secrecy occasioned no
debate, nor was it modified to any notable degree."
24
In other words, the version of February
1933 had not been changed substantially. The consequences of article 47 of the Banking Law
made a violation of Swiss banking secrecy subject to penal law and made heavy fines and
imprisonment up to six months possible.
25

Finally Guex states that "[t]he adoption of the 1934 law thus represented a considerable
reinforcement of banking secrecy and was the first time that this practice obtained a clear
basis in federal law. [...] By recognizing that the safeguarding of banking secrecy was in the
public interest, the state in a certain sense conferred on this secrecy law the status of public
weal. With its adoption Switzerland became, among economically developed countries, the
one with by far the most rigorously protected banking secrecy law."
26

23
PERRENOUD / LPEZ. 2002. p.67-70
24
GUEX. 2000. p.244
25
Ibid.
26
Ibid.

10
From 1935 on, the question on the double taxation treaty worried the Swiss banking sector.
Swiss industrials who were present in France were trying to obtain tax reliefs from the French
authorities in their sector, as France wanted to tax all business activity which foreign firms
had realized in France. The Basler Handelsbank was concerned primarily by these attempts.
In January 1935, Swiss banks were fearing that if French authorities would have received any
information of Swiss accounts, "this would be extremely prejudicial to the interests of Swiss
banks."
27

The interesting thing is that the banking sector was not homogeneous. The private banking
sector considered the attitude of the Swiss bankers association to be too concurrent with the
interests of the big banks and the industrial sector in Switzerland, which were aiming at an
agreement with France.
28

In November 1935 private bankers such as Albert Pictet informed and warned their colleagues
several times of the negative consequences of a mutual fiscal cooperation. From his point of
view, all economical branches (insurances, etc.) should protest against these attempts as the
danger for the economical sector in Switzerland was enormous. Ultimately, Pictet's goal was
that the Federal department of finance and customs should take into account the arguments of
the private bankers. In response to this, the Swiss bankers association hired Adrien Lachenal,
a special jurist, to write a legal report with a standpoint on the actual situation in March
1936.
29
Within the Swiss bankers association committee, the big banks replied to the concerns
of the private bankers after the publication of Lachenal's report. The ongoing discussion led to
a compromise allowing the homogenization of interests of private bankers and the Swiss
bankers association. The compromise between both banking groups allowed the Swiss
banking secrecy to be preserved and secondly did not end the negotiations with France. Some

27
28
Ibid.
29
DODIS-Datenbank. Archives ABPS. Procs-verbal du comit de l'ABPS. 17.3.1936 [online]

11
months later the private bankers received support from the conference of the cantonal
directors of finance who refused all kind of cooperation in fiscal matters as well.
30

2.3 International context
In February 1936, the federal council had decided to send a delegation to Paris to avoid a
double taxation treaty. The decision was a late reply to an existing problem since the First
World War as Swiss businesses had been suffering from increasing tax burdens.
31
Firms in the
industry sector such as Brown, Boveri or other firms in the chemical sector such as Ciba,
which were Swiss firms but had a branch in France, had been complaining to the Swiss
federal authorities about the increasing taxes in France and asked the Federal authorities to
take action against it. The Swiss authorities had been passive on this issue (rising taxes for
Swiss firms in France) for a long while. Nevertheless, this issue, in combination with the Paris
affair and the threat of a double taxation treaty made it almost inevitable to discuss several
issues. The necessity to discuss all these issues came from the fact that commerce between
Switzerland and France as well as economic ties were at stake.
32

Switzerland refused to offer its cooperation in any way to any state in fiscal matters and there
existed no interest for Switzerland to mutually collaborate with the French organs in fiscal
matters, says Besson.
33
Furthermore he puts forward that the Federal Council tried to explain
to the French that Switzerland had always refused any cooperation in fiscal matters with any
state. It was probably referring to the year 1901, when French heirs had shifted their
inheritance to Switzerland (due to a new norm in France which taxed inheritance) to avoid
taxation from the French authorities.
34
Nevertheless, France continued to look for
concessions. However, as the handing over of client details would lead to the unblocking of

30
31
Ibid
32
Ibid.
33
BESSON. 2004. p.27
34

12
the proper funds of the bank concerned, the risk of any Swiss bank delivering the details by
itself to the French authorities augmented.
35
So the political authorities in Switzerland were
worried that their opposition was not sufficient to guarantee the sanctity of Swiss banking
secrecy.
To prevent this the Federal Council stated in its instructions in February 1936 to avoid any
political or monetary measure which could lead to any kind of disturbance or could cause
anxiety.
36
In February 1937, the Swiss banks followed and acted very carefully as they did not
want to provoke France or give any pretext to French authorities to sue or accuse any Swiss
firm or bank of promoting or even favoring fiscal fraud. They limited their correspondence to
a minimum with their French clients and abstained from advertising in French news papers.
37

In Pictet's opinion France had no intention to overthrow itself with Switzerland. Buying time
would play into Switzerland's hands as France had no intention to overthrow itself with
Switzerland due to the deteriorating political situation in France.
38

Pictet was referring to numerous points. Although the Paris affair had created turmoil in
France since 1932, the real debate actually started in 1935. Whereas the economic crisis of
1931 devaluated currencies throughout the world, the French Franc appreciated due to its
archaic economical structures. This mechanism which had protected France in 1931 became
an obstacle to an upturn in the French economy in 1935 as France was becoming less
competitive in comparison to other capitalist countries such as the USA for example, which is
when troubles with Switzerland (due to the Paris affair) became more intense. So the national
production stalled. Besides the national economy suffering, social problems such as a
devaluating nominal salaries especially hit the middle classes as they lost their income. This

35
Ibid.
36
37
Ibid.
38
Ibid.

13
social crisis led to a political crisis, as it concerned the governing (radical and moderate)
parties. While the elections in 1932 had been a success for the left and socialist parties, who
had promised fundamental changes for the French economy, they were still having various
problems with the government and amongst themselves. The rise of Fascist parties in Europe
around 1935 led to a rapprochement between left, socialist, anti-fascist parties and
organizations (a so called front populaire) which led to the socialist victory of Lon Blum
being elected as premier minister in 1936.
39
Pictet meanwhile kept writing to the Federal
Council and asked to stall for time and not to concede.
Pictet was to be proven right. The Blum government's incapacity to relaunch the economy,
strikes within the country and other reasons led to the fall of the Blum government in June
1937 and a rupture of the front populaire in the following months.
40
So Switzerland was in a
rather strong position in November 1937, when the conflict was resolved by a Franco - Swiss
treaty, which some private bankers such as Pictet had been fighting for since 1935. Pictet still
made every endeavor not to collaborate with the French authorities in fiscal matters.
41

With the approval of the 200 million credit by the Swiss banks to the French Railways the
whole affair was definitely off the table. France had been in need of credit to allow works in
the French Railway industry. The treaty allowed to put aside the question of a mutual fiscal
cooperation. This allowed the banking secrecy to be recognized from both governments and
gave the Swiss bankers a considerable margin to maneuvre.
42

Having analyzed the national and international context, there seem to be various reasons why
France failed to obtain information on deposited funds or their owners.

39
BERSTEIN / MILZA. 1996. p. 272-296
40
Ibid.
41
PERRENOUD / LPEZ. 2002. p.73 -74
42
Ibid.

14
On the national level it can be said that there was no national opposition to the inscription of
the Swiss banking secrecy. Although the workers union, the farmers union and the middle
classes (which had pressured the Federal council to draft a bill on banking law) had other
motives to enforce Swiss banking law (namely the control of the banks), it turned out that the
formal inscription of the Banking Law also enforced protection towards the exterior.
It seems to be rather interesting that although the Swiss Bankers association supported and
represented the interests of big banks and the industrial complex, the private banking sector,
represented by private bankers such as Pictet, was able to put forward its concerns and
therefore took up a major role in the discussion as private bankers such as Pictet have been
able to influence the federal council (although they don't have their proper "private bank
affairs" interest representative comparable to the Swiss bankers association). The reason why
the interest of those two groups diverged was that on one hand the industrial complex and the
big banks (represented by the Swiss bankers association) were trying to obtain tax reliefs in
France for Swiss firms, whereas on the other hand the Swiss private banks had been trying to
preserve their French customers' privacy. The negotiations between France and Switzerland
had taken up both issues as objects of discussion. So if Swiss representatives made a
concession on one of the issues the other issue would have prevailed. So both parties (big
banks and small banks) were eager that their own cause prevailed. The reason why Pictet's
advice probably prevailed was that he proposed to stall for time which made a trade-off
between the two interest groups superfluous.
43

On the international level however, different factors seem to have played a role.

43
PERRENOUD / LPEZ. 2002. p.71 -74

15
Firstly, Pictet might have been right about the fact France was politically unstable
44
and was
in the need of a credit. This was an advantage for Switzerland in the negotiations, as the
Federal council knew about the situation in France, but this mere fact does not completely
explain why France could not get its demands through.
A second, more important factor was that there was no international pressure on Switzerland
or considerable international support for France which would have made it more difficult for
Switzerland to completely oppose any cooperation. The reasons why France did not have any
support from other countries, during the affair was that firstly, Switzerland's financial center
was relatively young to other European financial centers (such as London).
45
Therefore it did
not have intense economic ties with other countries similar to those with France. In fact the
French had been "traditional investors in Switzerland"
46
. Secondly, the Belgian government
was bothered by wealthy Belgian citizens who had their assets in Switzerland and therefore
escaped taxation. However the Belgian and the French government together only embarked
on relatively modest measures.
47
Thirdly, Germany (the Weimar Republic), which probably
would have been the only potential partner to back up France in this matter (as it was
concerned by capital flight to Switzerland too) was preoccupied with rapidly changing
governments and a bipolarization of the extremes (the uprising Nazis and the communists).
48

In fact, it remains even questionable whether a (hypothetical) stable German government
would have supported France due to long standing quarrels and rivalries since the First World
War and German rvisionnisme.
49
Besides, a lack of other states cooperating with France
comforted Switzerland in its position as France was also looking for deposited funds of

44
VOGLER. 2006. p.20
45
RAPPO. 2002. p.17-51
46
VOGLER. 2006. p 20
47
GUEX. 2000. p.240-243
48
BERSTEIN / MILZA. 1996. p.309-337
49
Ibid. p.217-222

16
French citizens in other countries such as Germany or the Netherlands
50
, where the Dutch
parliament raised questions about abolishing the banking secrecy. A Swiss envoy to the
Netherlands reported in 1932 to the Swiss authorities, that the Dutch government had
answered, that if banking secrecy was abolished enormous amounts of capital would have left
the Netherlands. The Swiss envoy concluded that it would rather be wise not to alter the
existing situation.
51

Thirdly, Switzerland had to make sure in front of the international scene that it would protect
and safeguard its interests as this incident marked the first major crisis in Swiss banking
secrecy practice. If Switzerland had caved in, this probably would not have been a very
positive message for other private individuals who had chosen Switzerland for their banking
purposes. Neither would the financial centre with its practice of discretion
52
have looked very
good. One might think that this argument could be used for all three periods, however the
Paris affair was the first "real" attack on Switzerland's banking secrecy so it was very
important especially in this first stage to defend the banking secrecy very eagerly. The Swiss
banking sector had been existing since the 18
th
century but playing a minor role in the world
until 1914. It is the confiscation of private property by the government during the Bolshevik
revolution in 1917 and the end of the First World War, which led individuals to transfer their
assets to Swiss banks. This allowed Swiss banks to grow and to multiply in their number.
53
So
the attack during the Paris affair was the first proper challenge, during which Switzerland had
to demonstrate strength.

50
Ibid. p.19
51
Ibid. p.93
52
WESPI. 2009. p.9
53
RAPPO.2002.p.17-51

17
The role of the Paris affair, however, for the formal codification of Swiss banking secrecy
remains contested. Authors such as Guex
54
, Hug
55
and other authors support the hypothesis of
the affair having significantly contributed to the codification of the Swiss banking secrecy
whereas others such as Vogler
56
deny this.
3. Toward and at the end of World War II

3.1 What happened?
During the 1920s and 1930s several Europeans had been depositing money in Switzerland for
different reasons such as the devaluation of their national currency, political instability in their
country, expropriation or war. Switzerland's strong currency, the international reputation of
Switzerland as a financial centre and its position at the heart of Europe made Switzerland very
attractive for capital from other countries. Transfers for fiscal reasons therefore played a
marginal role. After the Second World War, the advantages of the Swiss financial centre did
not only attract "legal" money but also money from "illegal" sources such as money from
potentates and other sources.
57
Potentates during the Cold War in Switzerland such as those of
the Dominican dictator Trujillo or the Shah Pahlevi of Iran were not uncommon in
Switzerland.
58

Toward the end of the Second World War and immediately after the Second World War
Switzerland came under international pressure. Even though storage of fortune abroad had
been forbidden under the Nazis, some of the high officials must still have stored a
considerable sum as the Allies pressured Switzerland to hand over these sums as well as the

54
GUEX. 2000. p.247-252
55
HUG. 2000. p.18
56
VOGLER. 2006. p.23
57
WESPI. 2009. p.14
58
BESSON. 2004. p.93

18
gold which had been looted of the invaded countries, especially those of Belgium and the
Netherlands.
59

The strong attraction and the success of the Swiss financial centre was not only positive news
as the success of Switzerland meant a relative devaluation of other financial centers in the
world such as London. This in turn led to a series of attacks and scandals which aimed at
Switzerland in particular.
60

Switzerland saw itself as a neutral country and therefore traded with the Allied Forces but also
with the Forces of the Axis Powers. In 1941, the United States blocked Swiss fortunes assets
on American soil despite the interventions from Swiss diplomats and bankers
61
and threatened
to put Swiss bankers as well as industrials on to a "black list"
62
which would have had
negative impacts for the economic order after the war. So Switzerland had to consider these
consequences, although the Swiss National Bank doubted that the United States would be able
to lift the Swiss Banking secrecy.
63
Even though the literature doesn't agree upon this
hypothetical question, the chance is probably higher that the USA would not have started an
economic warfare, mainly because they were preoccupied with the question of the
reconstruction in Europe as well as the containment of the emerging communist bloc.

3.2 National context
Albert Charles Nussbaumer, the general director of the Swiss bank corporation
64
stated in
February 1943 that Great Britain and the United States were well-disposed toward
Switzerland but would not hesitate to give less priority to countries which figured on the black
list when it would come to the redistribution of scarce resources after the war.

59
BESSON. 2004. p.28
60
WESPI. 2009. p.14
61
PERRENOUD / LPEZ / ADANK / BAUMANN / CORTAT / PETERS. 2002. p.554-572
62
BESSON. 2004. p.29
63
Ibid. p.28
64

19
The Swiss representatives did not want to give in to the pressures of the Allies, which became
impatient and were provoked by the Swiss dilatory politics. In the beginning of 1944,
negotiations had to be held in Lisbon, where it became necessary to make concessions from
the Swiss point of view, nevertheless maintaining the core values of the Swiss financial
centre. Nussbaumer tried to convince the Swiss bankers association to deviate from their
original position in order to preserve the funds blocked in the United States.
65

Still in the beginning of 1944, the debate was heated amongst the bankers. Max Brugger, the
delegate of the administration council of the Basler Handelsbank estimated that the Allies
were forcing the banks to capitulate, violate Switzerland's neutrality and to stop all
economical activity.
66
Nevertheless, there were only few similar voices (implying that
Switzerland had to resist against those pressures) but the majority of the delegates of other
banks considered that the best option would be to opt for a cooperation with the Allies to
evade the black list whilst continuing with the dilatory politics, in March 1944.
67
So why were
bankers once again not united?
As the banks had different commitments in different countries, their interests were different as
well. Banks which were engaged in Central Europe and in Germany expressed the most
reserves and those banks which had deposited most of their funds in the Allied countries were
more open and ready to cooperate.
68

As if negotiations weren't complicated enough, the private bankers had their say as well. At
the conference of directors in March 1944, Albert Pictet warned that even if Switzerland
"violated" its neutrality and took position for the Allies this wouldn't be very easy to translate
into practice as the operations to be suspended (forex trading for example) would soon be

65
66
Ibid.
67
Ibid.
68
Ibid.

20
taken over by the black market and therefore no real change would be attained (what the
Allies were looking for) and Swiss banks would lose out on business opportunities.
69

During the discussion one banker said that at the moment, banks would rather lose a customer
instead of being placed on the black list. Another banker noted that 43 billion Swiss Francs
had to be refused from foreign customers because of the danger of the black list. However,
general concern was shared and the possibility of writing down the customers' names was
discussed, so that if it turned out that those customers had been taken on by the competitors,
these incidents could have been notified to Zurich. So in other words every bank was fearing
losses towards other national banks. It may seem that the Swiss federal policy was determined
only by banking interests but it was also influenced by the industrial complex, which however
was represented by the Swiss bankers association. In general, the fact that the banking
industry had a very determining saying on the Federal policy came from the fact that
Switzerland had been a very militarized country, meaning that military service was
compulsory. Every citizen who held a high ranked position in a bank was most likely an
officer in the Swiss army. Only "capable" citizens were selected for officer positions in the
army. So, high ranked bank officials in a way were considered as "unofficial" Federal
officials, which explains why banking interests determined Federal policy to a large extent.
Besides, the banking sector was comparatively bigger to other branches and therefore
outweighed smaller interest groups.
70

The landing of the Allied Forces in the Normandy gave the pro - Allied Forces camp
additional arguments to decide in favor of them.
71

Finally, in the beginning of 1945, the evolution of the international situation, the weakening
position of the Swiss bankers association and the will for a new policy of the new chief of the

69
70
WOZ. Der Banker als Hilfssheriff. published on the 10.02.2005 [online]
71
Ibid.

21
diplomatic corps, Walter Stucki, changed Switzerland's policy. He wanted to investigate on
the question of the looted funds in a general study, not exposing the names of the clients
which would safeguard the Swiss banking secrecy and would disable mutual fiscal
cooperation. He faced intransigent criticism by the bankers who relentlessly argued in the
same manner as in the past that this would create capital evasion from Switzerland and that
the advantage of Swiss banks would be taken with one shot. He replied that this capital
evasion was highly improbable as firstly the assets were blocked (so in fact it was
impossible). Secondly, a capital flight due to an investigation on looted funds was
improbable, as the investigation had nothing to do with mutual fiscal cooperation (implying
that the investigation would only cover the search for looted funds and that the aim of the
investigation was not at all to determine the names of individuals who had placed their assets
in Switzerland).
72
Hence, by doing an investigation on looted funds and keeping the names
anonymous, Switzerland would be able to resist "any pressure tending towards fiscal
assistance."
73

In summer 1944, military processes had accelerated and the Allies signed a resolution in
Bretton Woods demanding the restitution of the looted funds of the neutral countries.
74

Criticism launched by Harry White of the American Treasury Department was scathing which
provoked a reaction from the Swiss bankers association. They sent a delegation to
Washington but failed since the American officials didn't give much credit to professional
organization and wanted to discuss with federal authorities.

72
Ibid.
73
Ibid.
74
Ibid.

22
Then in September 1944, the conditions deteriorated and the Swiss bankers association
adopted two texts replying to the concerns of the Allies of which one was put into circulation
with the title "instructions extraordinaires dues aux circonstances prsentes" which the
general managers of every Swiss bank received. It stated that although Swiss banks had ever
since attached the biggest priority to economic liberty, some restrictions were inevitable due
to the actual circumstances and that banks had to be restricted even more despite the
numerous restrictions already introduced since the war.
75

Robert Kohli, who was the main responsible for financial matters in the Swiss government
was not very fond of Stucki's idea (cited earlier) either, arguing that when Allied forces had
asked for looted funds, Switzerland pretended not to know about the existence of such funds
in Switzerland. If a general study was done, the denial of such funds would not be possible in
the future, which had been very useful and handy to deny mutual fiscal cooperation. He
proposed a rather limited investigation and a more confidential one similar to another
proposal of the Swiss bankers association.
76

Stucki put forward that if Switzerland did not do anything at all, the world's hatred would be
on Switzerland. Other voices countered that Switzerland should be careful as the American
policy was supposed to be dictated by Wall Street, implying that the Americans were not
mainly guided by philanthropist thinking but that motives of competition should be
considered and probably prevailed.
77

The Federal Council took a decision in this matter in March 1945 and decided to go with
Stucki's solution. This decision was a rupture in history of the Swiss banking history as firstly
the import, export and the trading with foreign bank notes was prohibited. Secondly, the
Swiss government signed a treaty with the Allied Forces to look for the looted gold in

75
Ibid.
76
Ibid.
77
BESSON.2004. p.29

23
Switzerland but opposed an investigation on Swiss territory by foreign officials. In other
words, Swiss authorities were happy to look for those funds and do thorough research but did
not want any foreign intervention or control of any international organization.
For the looted funds, one concession was made, but limits remained, meaning that the Allied
forces had to bring up the proof of the looted funds and had to act within Swiss legislation.
78

After all the negotiations, the general director of the Swiss Bank corporation, Nussbaumer,
said that although concessions were made, the advantages laid certainly in the political
domain (implying that the great advantage was for Switzerland as country) as they had
permitted to maintain neutrality and normalized relations to the Allies.
The treaties of March 1945 had not dealt with all questions. For example, the question on the
identification of Nazi victims and the question of possible heirs had not been included. The
identification of the clients was conferred to a Swiss organism ("Office de compensation") and
not to the Allies as they had been demanding.
79

Furthermore, in 1946 Switzerland accepted to participate in the reconstruction of Europe by
paying 250 million Swiss Francs and as the question on the looted funds had monopolized the
attention, no further demands were made by the Allies.
The French funds laying in Switzerland, which constituted about six to eight billion Swiss
Francs at the end of the Second World War and which made up around half of Switzerland's
economy, were certainly challenged and put into question by the French authorities as well.
In spite of all these attacks, Switzerland will profit as an economic center, regarding the
unstable unity of the Allies during the Cold War, which will, as it turns out, be in favor of
Switzerland and offer new opportunities to Swiss banks.
80

78
79
BESSON.2004. p.29
80
BESSON. 2004. p.30 and PERRENOUD / LPEZ / ADANK / BAUMANN / CORTAT / PETERS. 2002. p.554-572

24
Besides all the concessions made and all the discussions held earlier, the negative
consequences for Switzerland were not forthcoming in the dimensions discussed during the
negotiations of 1945. From 1947 on, the concessions made on the looted funds or the question
of the victims were considered as a "fait pass" (something outdated).
There are several factors on the national as well as on the international level which were
important for the success of the defense of the Swiss banking secrecy.
On the national level the banking scene was divided even more than during the Paris affair as
the Swiss bank corporation, the Swiss bankers association, the private bankers and other
economical branches took different positions. Furthermore their positions were reflected by
the "camp" (Allies or Axis Powers) they had their funds laying in. The fact that banking
groups were not able to agree on which camp to choose, postponed a Swiss decision, giving
the Federal authorities time to think.
The Normandy landing gave Swiss federal authorities an incentive to tend for a solution
which would take into account Swiss interests after war, wherefore Swiss authorities partly
amended their isolationist course and adopted some of the measures favoring Allied forces
and disfavoring the Axis Powers. The reason for this deviation from the traditional course of
Switzerland was that the Allied forces had been threatening to put Switzerland on a black list
which would have endangered economical and trade relations between Switzerland and the
Allied countries, whereupon Switzerland did not want to take these major risks as the
concessions made were fairly poor in respect to the concession received.
81
In other words,
Switzerland chose the lesser of two evils, keeping in mind that if Switzerland had been put on
to the black list, the uncertainty of the relations with the Allies after the war would have
caused uneasiness amongst authorities. Even the economical sectors were worried and

81

25
preoccupied by this uncertainty, as they were losing out on a considerable amount of new
capital, which they had been refusing to take on (due to the restrictions of the Allies). If they
had not been worried about the uncertainty, they would have probably taken on the new
funds.
Although Switzerland decided look for the looted gold and for the funds of the Nazi victims,
it was able to maintain the core of its policy, namely the refusal of a mutual fiscal
cooperation, which would have been the consequence if the investigations had been made by
foreign officials.
On the international level, Switzerland was able to maintain its core policy due to different
reasons. First of all, efforts of the Allied forces were not concentrated enough or did not seek
very eagerly to obtain mutual fiscal cooperation. In fact, after the war, the only country which
asked for a mutual fiscal cooperation directly and criticized Switzerland openly for its support
of an "old an indefensible principle"
82
, was France.
83
This had different reasons as well. The
Cold War certainly played a major role that the Allied Forces were now starting to focus on
the communist containment rather than "some comparatively small tax issues" with
Switzerland. Secondly, Switzerland signaled a certain will to cooperate by accepting
important demands of the Allies and concluding the negotiations.
84
This certainly played a
role as the Allies did not address more demands, whereas if Switzerland had been stubborn,
the demands may have been higher. Thirdly, Switzerland did pay 250 million Swiss Francs to
reconstruct Europe, which also underlines the will to cooperate and help ("suggesting their
good will") as Switzerland did not have any other measures to directly and immediately
support Europe. Fourthly, the question of taxes (mutual fiscal cooperation) is not
preponderant and other issues such as the looted funds and the funds of the victims seem to be

82
BESSON. 2004. p.30
83
Ibid. p.29-30
84

26
more important, which explains why the Allies tried to lift or at least loosen the Swiss
banking secrecy by this mean rather than through a fiscal cooperation where the perspectives
seemed rather unpromising.
4. Recent quarrel

4.1 What happened?
The events which occurred in 2009 clearly marked a turning point in Switzerland's history of
Swiss banking secrecy.
This chapter will elaborate why this is the case. The OECD had been working on questions of
international cooperation in tax matters and the international tax competition for a long while.
One of these measures which had been elaborated was an "OECD model convention" which
served to avoid double taxation in income and wealth matters. Double taxation treaties in
general avoid the taxation in the state in which the holder's account is deposited and another
taxation in the country in which the holder has his legal residence. The whole purpose of such
treaties is to prevent people and companies from shifting large funds into another country in
which they otherwise would not declare the funds and therefore would not have to pay
taxes.
85

The conflict between Switzerland and the OECD was already on the horizon in October 2008.
During a meeting of 17 EU and OECD member states which had been discussing
international fiscal evasion, Switzerland was criticized, as mentioned in the introductory part.
In return, Switzerland criticized Jos ngel Gurra (the general of the OECD) for
participating in this meeting, giving the impression of an official and formal reunion of the
OECD.
86

85
WESPI. 2009. 29-34
86
Ibid. p.34

27
In 2009 international pressure was exerted on Switzerland due to the former practice of
information exchange (mutual fiscal cooperation). In March 2009, rumors were spreading that
the OECD was going to publish a "black list" which had been ordered by the G-20 and which
Switzerland was supposed to be on.
87

The G-20 had decided in April 2009 to suppress tax oases and other measures to deal with the
economical crisis reaching back to the year 2008. One of these measures was to create a
"black list" in order to mark non-cooperative countries in cases of tax fraud. The list finally
was published on the 2
nd
of April 2009
88
and contained the modifications which had been
discussed in the London Summit of the G-20. The perceived consequences in Switzerland of
being put on to a "list" were rather of immaterial nature
89
than material (e.g. fearing a loss of
capital). Similar to the grounding of the Swiss Air in 2001
90
, the UBS scandal
91
had slightly
damaged the brand "Swiss", "Switzerland" or "Swiss made". As these damages have occurred
in the past ten years and accumulated, Switzerland and it's banks feared an even more
negative image by the international society if it hadn't adopted the international standard in
tax matters. This would have probably led to a loss of confidence in Swiss values (such as
reliability, perfectionism and so on) in general.
92

The list differentiated between three kinds of states. The first group ("black list") contained
four countries which had not adopted and did not want to adopt the international standards.
They "grey list" contained 38 countries which had accepted the international standards but
had not substantially implemented them yet (less than 12 international double taxation treaties
concluded). It had two categories within this grey list. Eight of these countries (such as
Switzerland for example) were classified as "other financial centers" and 30 of them were

87
Ibid.
88
HANHARDT REDONDO / BRAILLARD / SCHWAMM / ARTIGOT. 2009. p 17
89
NZZ. Weckruf fr die Marke Schweiz. published on the 24.5.2009 [online]
90
BASLER ZEITUNG. Dossier: 10 Jahre Swissair-Grounding. published on the 2. 10.2001 [online]
91
TAGES ANZEIGER. Villiger vergleicht UBS-Desaster mit Swissair-Grounding. published on the 02.05.2012
[online]
92
NZZ. Weckruf fr die Marke Schweiz. published on the 24.5.2009 [online]

28
classified as tax havens. Therefore Switzerland was put onto the grey list without classifying
it as a fiscal paradise. The white list finally listed all the forty countries who had substantially
implemented the international standards.
93
The detailed map is attached to the Annex at the
end of the dissertation.
Although Switzerland has been a founding member of the OECD, Switzerland claimed not to
have been informed on the creation of such a list and therefore protested to the OECD. This
issue will be discussed later. Nevertheless, whether Switzerland had been informed or not, it
did not change the fact that the Federal Council decided on the 13
th
of March 2009 to adopt
the international standard due to the rising pressure on Switzerland since the publication of
the list.
94
Switzerland took up international negotiations as quickly as possible and signed
different conventions "to leave" the grey list. On the 25
th
of September 2009 Switzerland had
already abandoned its "grey status" and opted for the white list.
95

4.2 National Context
The whole affair with the OECD states but also trouble with the United States were debated
during a discussion in the parliament on the 17
th
of March 2009 after the decision of the
Federal Council. The decision of the Federal council was not strongly contested by the
parliament, rather other issues were taken up and the Federal Council was criticized which
will be elaborated more precisely in the following lines. Bruno Frick from the center-left CVP
(Christlich - Demokratische Volkspartei) stated that he had several remarks to make upon the
decision of the Federal council. He established that the change of mind was correct and was
needed, especially today. The change in people's minds had different roots.
96

93
WESPI. 2009. p.35
94
Ibid. p.36
95
Ibid. p.37
96
The looted assets during the Second World War which had been deposited in Switzerland did not create
much turmoil immediately after the end of the Second World War. However in 1962 a federal order of court to
look for the funds of the victims of the Nazis, was issued, which led to few results. By 1972 only 9 million Swiss
Francs had been found and there were far more accounts which were supposed to be lying in Switzerland.

29
The problem with this kind of change of attitude is that Switzerland has been looking after
almost 27% of the world's offshore funds and that if the Federal Council once stated that the
banking secrecy is "not negotiable" or that the foreign states "will break their teeth" on the
Swiss banking secrecy and all of sudden changes its course by making concessions, the Swiss
population and people who deposit their funds in Switzerland will lose faith in the
government.
97

The second point he addressed was the OECD. He was very outraged by the fact that the
OECD had been creating a list behind Switzerland's back (implying that Switzerland had not
been informed despite the fact of being a founding member) and was not allowed any
examination of the documents. Although the OECD's general Jos ngel Gurra claims to
have informed Switzerland more than once during several meetings, the former Federal
Counselor Merz replied that he did not know of anything similar.
98
He also mentioned that
such an attitude (circumventing Switzerland) would not be acceptable and that Switzerland
would have to rethink its membership and maybe sanction the OECD by cutting Switzerland's
non-compulsory financial contribution, which was initiated and effectuated some days later
by other parliamentarians.
99

These events induced the president of the World Jewish Council and business man Edgar Bronfman in 1995 to
visit Switzerland and to restart the quest for the long-dormant accounts. As no proper results were achieved
Bronfman sought the senator of New York who was Alphonse d'Amato at the time. Together they engaged in a
very active media campaign against Switzerland which was nourished by revelations from American archives
which shed an unfavorable light on the relations between Switzerland and the German Reich. The Swiss
government reacted by creating the ICEP (the Independant Commission of Eminent Persons), also known as the
Volcker Commission. The Commission examined 53886 accounts which could have had possible links with the
Holocaust victims and finally published 23000 names. Furthermore the Bergier Commission which examined
the role of Switzerland during the Second World War in 1996 and published its report in 2002 shed an
ambiguous light on Switzerland and its banks. These two Commissions certainly changed Swiss people's
perception of Switzerland and its banks' high held moral reputation in the negative sense.
97
Swiss parliamentary archives (Amtliches Bulletin - Die Wortprotokolle von Nationalrat und Stnderat)
09.3032, Dringliche Interpellation Frick Bruno Situation des Finanzplatzes Schweiz
98
TAGES-ANZEIGER. Merz antwortet OECD: Nichts vom G-20-Auftrag gewusst. Published on the 10.04.2009
[online]
99
09.3350, Interpellation Briner Peter. Suppressiondes contributions non obligatoires l'OCDE

30
Thirdly, Frick said that (which seems to be an explication why the Federal Council had to act
by itself) in Switzerland the parliament is relatively strong in comparison to the executive (the
Federal Council) which is in a relatively weak position (implying the compulsion under which
the Federal Council was). In the future the Federal Council should be strengthened not by
additional competences but by institutional changes which would make it easier for the
Federal Council to act in critical situations. So indirectly Frick is saying that the political
system and the political processes in Switzerland are a reason why Switzerland (the Federal
Council) had to make these concessions, as usually international treaties are subject to
facultative referendums.
100

In other words, had the Federal Council opted for a solution which would have allowed to
take the facultative referendum, the 100 days required for a facultative referendum's
expiration date would have endangered Switzerland even more, as quick adaptation measures
were required to respond to the delicate situation in March 2009. Frick also said in his speech
that the Swiss distinction which had been made between fiscal evasion (non-declaration or a
fault in the declaration in the taxation process) and fiscal fraud (active omission of funds in
the taxation process) which up to now had been clearly distinctive in Swiss legislation did not
find any comprehension in the international system any more.
101

The reason for the distinction between tax evasion and tax fraud in the Swiss system had been
done, as tax affairs had to be filled out personally and so errors occurred frequently, whereas
in other countries this was not the case, wherefore the Swiss practice was no longer
acceptable in the international community. If an individual made a mistake in the declaration
of his tax form this was considered as a fiscal evasion (an administrative error). If an

100
For further information see article 141 of the Swiss constitution [online] :
http://www.admin.ch/ch/d/sr/101/a141.html
101

31
individual actively omitted the declaration of the funds this was a case of fiscal fraud.
102

Fiscal evasion and fiscal fraud were perceived to be one and equal since this event from an
international perspective.
Fourthly, Frick said that another political process was a problem. The Federal Council had
used an expert group for its decision making which Frick clearly sees as a minimal
requirement but he says that the Federal Council failed to integrate a political legislative
component (work group for example) which would have even more legitimized the decision
as it would have been a decision of the executive and the legislative. Finally Frick concluded
that these measures taken had to be reciprocal (that other offshore states such as the United
States would also have to fill their gaps). He was referring to states such as Nevada, Delaware
and Wyoming in the USA which had a weak legislation for the identification of foreign firms
which saved taxes by having their main branch in one of these states.
103
Thus, Frick noted
that inquiries may only be made if the suspicion was well-founded and that these measures
would not expose the Swiss bank customers privacy completely. The possibility of so called
"fishing expeditions" in which a state asks another state for legal assistance in cases of
potential fiscal evasion, searching for individual's accounts randomly, would not be
tolerated.
104
This statement can be seen as a damage minimizing measure.
States council Peter Briner (from the FDP, a liberal and center - right party) joined Frick's
argument and also mentioned that a lack of international networking was a reason why the
federal Council had to discretely take this decision. Had the Federal Council been better
integrated in international financial boards, Switzerland would have possibly been able to
influence the happening. He also added that the automatic information exchange (upon an
inquiry from another state) was off the table and this clearly presented a good option given the

102
MUELLER.1998.p. 79-80
103
HANHARDT REDONDO / BRAILLARD / SCHWAMM / ARTIGOT. 2009. p.19
104

32
circumstances. Switzerland was also better off instead of landing on a black list which would
have created a lot of more trouble for banks and the industrial sector as well.
105
So to be clear,
the CVP and the FDP came to the same conclusion, perceiving this as the best course.
The left party with States Council Simonetta Sommaruga did not actively criticize the Federal
Council of the decision per se either, but blamed the Federal Council for not having sought a
pro-active role in this matter. So, having to act out of a defensive position which made
Switzerland's position weak, was her main critique. The critique has to be understood in its
context as the social democratic party (SP) had always been calling for a more active and a
more auto-initiative role regarding the banking secrecy and the problems related to fiscal
cooperation. The SP was annoyed that warnings which had existed in minor forms since 2000
had been ignored although the Federal Council knew that the pressure on the banking secrecy
would rise in the next years,
106
which ultimately forced the Federal Council to act rather than
allowing a free decision making.
The Swiss populist party (right wing) joined the arguments of most of the parties and
emphasized that the measures now adopted had to be taken with respect to other offshore
centers, so Switzerland would still be an attractive financial center.
107
This was certainly an
important aspect for a lot of Swiss parliamentarians as these lists which had been created had
been part of political power play. For example British financial centers such the isle of Jersey
and the isle of Man had been figuring on the white list, although it was known that opacity
had been reigning for a long time. The mere fact that a country had actually signed twelve
double taxation treaties did not necessarily tell a lot about the quality of the fiscal cooperation
regime, and showed to what extent arbitrary reigned in these kinds of matters.
108

105
106
Ibid.
107
Ibid.
108
HANHARDT REDONDO / BRAILLARD / SCHWAMM / ARTIGOT. 2009. p.17-19

33
The Swiss bankers association had published a press release on the 13
th
of March 2009, after
having discussed all different scenarios of possible outcomes and repercussions for
Switzerland. It stated that this "forward" strategy actually was the best solution for
Switzerland. Why was this the case? The Swiss bankers association was in favor of this
strategy, as with the adoption of article 26 of the OECD Model Convention, Switzerland
would firstly, not have to exchange information automatically with partner states. Secondly,
"fishing expeditions" (a procedure in which states would randomly make inquiries about their
citizens) would not be possible. Thirdly, every double treaty with another state had to be
negotiated individually. So the extent of the information exchange was not a general solution
which comforted the Swiss bankers association. Fourthly, the Swiss bankers association took
into account that international customers who only had committed tax fraud or tax evasion
would not be protected anymore. Fifthly, the Swiss bankers association asked the Federal
Council not to give in, in cases of unilateral pressure (implying that treaties ought to be
reciprocal). Finally, the jurisprudence for the exertion of double taxation treaties did not
stipulate any retrospective treatment of any kind of fraud.
109

Although the distinction between fiscal evasion and fiscal fraud did not exist anymore for
international customers it still persisted for national customers. The Swiss bankers association
also mentioned that Swiss banking secrecy was still in force for upright international
customers implying that customers who had deposited their funds in Switzerland and properly
declared them to their residential state did not have to fear any privacy loss.
110

In 2009, Switzerland came under enormous pressure, as this pressure had been building up
constantly and was a result of macro-economical circumstances and international fiscal and

109
SWISS BANKING. Das Wichtigste in Krze zum Verhandlungsangebot des Bundesrates hinsichtlich Amtshilfe
in Steuerfragen vom 13. Mrz 2009. 2009
110
Ibid.

34
political interests, which found an unusual unanimity of the most important economic
nations.
111

One of the reasons for Switzerland's behavior to rapidly adopt the international standards
certainly lies in the fact that Switzerland had been pressured internationally by OECD states,
the G-20, the United States and the European Union as much as its neighbor Germany. For
example in 2009, financial minister Peer Steinbrck held a provocative speech making visual
comparisons calling Switzerland "native Indians". As the "carrot" had not been working for
Switzerland, he now saw the urge for the "stick".
112
The whole message was very badly
received in Switzerland as Steinbrck had already threatened to put Switzerland on a black
list earlier. This had deteriorated diplomatic and public relations with Germany.
Fiscal and economical problems with Germany were omnipresent as some individuals and
bank employees had stolen personal data of customers, burnt the data on a compact disc and
sold the data to the German authorities, in 2010.
113
So, tense relations have not cooled off and
even worsened as just recently, in March 2012 three officers from the German tax
investigation had been arrested on Swiss soil.
114

This attack is the first attack which succeeded. It was a "coordinated" attempt (in a reunion
which was able to meet up due to the collapse of the bipolar system after 1989) and one which
was taken by unanimous decision (in the sense that there was no obstacle of an important
power such as Russia or China) similar to the situation after the Second World War. So two
components (coordination and unanimous action) are provided in this case.
The second reason for the success of this attempt or in other words the change of the Swiss
policy can be explained by the preceding economical crisis. As the economical crisis in 2008
had caused financial and economical damage to almost any country in the world, this asked

111
WESPI. 2009. p.34
112
NZZ. Peer Steinbrck oder die Lust am Brskieren. Published on the 18.3.2009 [online] and ARD. Tagesschau.
Die Wut der Schweizer ber Peitschen und Kavallerie. Published on the 04.08.2010 [online]
113
ARD. Tagesschau. Schweizer Politiker spricht von "Kriegserklrung". Published on the 31.03.2012 [online]
114
FAZ. FDP nimmt die Schweiz in Schutz. Published on the 03.04.2012[online]

35
for reinvestment into the domestic economy. The reinvestment had to be payed by the
government, which again receives its government spending or investment money from the tax
payers. Up to the financial crisis in 2008, very rich individuals had amassed their fortune
abroad, which had not been a problem up to then, as the government had enough funds to
cover their spending. Tax evasion was not a central issue dominating foreign politics,
although certain quarrels had been going on.
115
In other words the potential tax income,
generated by those who had been depositing their funds abroad and had not been declaring
them, became relevant and necessary to foreign governments all of sudden.
The third reason is a comparative factor. Switzerland was pressured internationally and
strongly after the Second World War and had been threatened to be put on a black list as well.
The decisive factor on the international scale has to be considered and regarded in global
terms. Before the actual negotiations had taken place in April 2009, other countries facing
similar problems such as Singapore, which had been refusing the adoption of international
standards of the OECD, announced in February 2009 to apply the international standard in
future. On the 25
th
of February, Hong Kong announced that the executive would work out a
legal draft for a cooperation which it would submit to the parliament by the middle of June
2009. Other countries who had been qualified as tax havens such as Andorra and
Liechtenstein and other financial centers such as Luxemburg had made concessions to adapt
their legislation, and one after another followed.
116

This meant for Switzerland that if it adopted its legislation it would, in relative terms, not lose
out on funds. Funds would not necessarily flow towards other off shore centers or tax havens,
as countries such as Luxemburg and Liechtenstein were on their way to adopt similar
measures.

115
NZZ. Der Steuerwettbewerb in Europa blht. Published on the 18.2.2007 [online]
116
WESPI. 2009. p.36

36
5. Conclusion
With the aid of three similar case studies the dissertation aimed to show a development in the
banking secrecy as well as in the practice of fiscal cooperation of Switzerland's policy. In a
first period with the Paris affair the dissertation showed that Switzerland did well in the
bilateral negotiations with France, taking advantage of the political context which was
deteriorating. In a second phase, the period during and after the Second World War was
marked by international pressure especially coming from Allied Forces. They were able to
force Switzerland to certain concessions such as actions discriminating the Axis Powers.
Switzerland was still able to reap lots of gains in the negotiations by paying a certain credit
for the reconstruction of Europe, similar to the credit which it had offered the French railways
during the Paris affair. Although Switzerland had to look for certain holders of Holocaust
victims' accounts and looted funds this was not a huge concession in comparison to the one
which Switzerland had to make in 2009. If Switzerland had been able to safeguard its main
interests up to now, this changed in 2009. Different international reasons such as constraints
which were coordinated and happened to occur on the same moment as well as the
economical crisis marked these events. More important, reasons on the national scale played a
major role as well. The Federal Council did not have a big choice and it made concessions to
avoid a further deteriorating status from the grey to the black list. The Federal Council made
these decisions as other political options would have existed to resist (in order to reap some
additional gains) but they incurred a very high risk (for the industrial sector) which was
simply too high.
What is different from other events in 2009, is the fact that resistance did not really exist to
the Federal Council's decision. Although in the aftermath, during the parliamentary discussion
voices criticized the Federal council for not having acted earlier, the critique was not aimed at
the decision itself.

37
So it was not only the international coordinated pressure and the fact that other offshore
countries adopted international standards at the same time, which compelled Switzerland to its
faith in March 2009. The political system, a lack of international integration and networking
of Switzerland with their international fellow organs and a passive strategy were reasons for
this ending as well.
What can Switzerland learn from these events?
If Switzerland's "Don't ask - don't tell" - policy had leniently passed the attack during and
after the Second World War, the event in 2009 certainly didn't. If the international
constellation after the Second World War (during the Cold War) was in favor of Switzerland
in terms of international pressure, the situation in 2009 was certainly no more convenient and
favorable. In fact, had this international and national constellation in 2009 not occurred, it
would probably only have been a question of time within which Switzerland would have had
to adopt international standards.
It will be interesting to see how things evolve in future and in what way the banking secrecy
is going to develop and with it the question of the mutual fiscal cooperation?

38
6. Bibliography
Sources
DODIS-Datenbank. Archives ABPS. Procs-verbal du comit de l'ABPS. 17.3.1936
[online]
http://db.dodis.ch/dodis%3Bjsessionid%3D5AAEBD458DF82A5501672374795148F
E%3FXE7lhitk68Vh22Scm8H6AAaHIUSwXiTyiYWN8mgcMcJSGDJxBYcdkOK3y
kstISkmGRao50EijtUqYalt&ei=mJ25T6WzEoGI0AX0uojyBw&sa=X&oi=translate&
ct=result&resnum=1&ved=0CDoQ7gEwAA&prev=/search%3Fq%3D17.3.1936%2B
proc%25C3%25A8s%2Bverbal%2Bcomit%25C3%25A9%2Babps%26hl%3Dde%26s
afe%3Doff%26biw%3D1920%26bih%3D900%26prmd%3Dimvns (last consulted
21.05.2012)

ICEP. Report on Dormant Accounts of Victims of Nazi Persecution in Swiss Banks.
1999. [online] http://www.crt-ii.org/ICEP/ICEP_Report_english.pdf (last consulted
06.05.2012)

JOURNAL OFFICIEL DE LA RPUBLIQUE FRANAISE. Session of 10
th

November 1932. p.2997 ff.

Swiss parliamentary archives (Amtliches Bulletin - Die Wortprotokolle von
Nationalrat und Stnderat) 09.3032, Situation des Finanzplatzes Schweiz, Dringliche
Interpellation Frick Bruno. [online]
http://www.parlament.ch/ab/frameset/d/s/4807/294449/d_s_4807_294449_294509.ht
m (last consulted 06.05.2012)

Swiss parliamentary archives (Amtliches Bulletin - Die Wortprotokolle von
Nationalrat und Stnderat) 09.3350, Interpellation Briner Peter. Suppression des
contributions non obligatoires l'OCDE [online]
http://www.parlament.ch/ab/frameset/d/s/4809/301878/d_s_4809_301878_302083.ht
m (last consulted 07.05.2012)

SWISS BANKING. Das Wichtigste in Krze zum Verhandlungsangebot des
Bundesrates hinsichtlich Amtshilfe in Steuerfragen vom 13. Mrz 2009. 2009
English Literature
ALLISON / ZELIKOW. Graham / Philip. Essence of Decision: Explaining the Cuban
Missile Crisis. 2nd edition. Longman. New York. 1999

GUEX. Sbastien. The Origins of the Swiss Banking Secrecy Law and Its
Repercussions for Swiss Federal Policy. in: The Business History Review. Vol. 74.
No. 2. 2000

VOGLER. Robert U. . Swiss Banking Secrecy: Origins, Significance, Myth.
Association for Financial History (Switzerland and Principality of Liechtenstein).
Zurich. 2006.
French Literature

39
BESSON. Sylvain. Le secret bancaire. Presses polytechniques et universitaires
romandes. Lausanne. 2004.

BERSTEIN / MILZA. Serge / Pierre. La fin du monde europen (1940-1945). Tome 1.
Hatier. Paris. 1996

HANHARDT REDONDO / BRAILLARD / SCHWAMM / ARTIGOT. Sandrine /
Philippe / Henri / Florencio. Secret bancaire et place financire: le combat de la
Suisse. Centre Patronal. Lausanne. 2009.

JEANNERET. Vincent. Transparance et secret dans l'ordre juridique. ditions
Slatkine. Genve. 2010.

PERRENOUD / LPEZ / ADANK / BAUMANN / CORTAT / PETERS. Marc /
Rodrigo / Florian / Jan / Alain / Suzanne. La place financire et les banques suisses
l'poque du national - socialisme: Les relations des grandes banques avec l'Allemagne
(1931-1946). ditions Payot. Chronos Verlag. Zrich. 2002.

PERRENOUD / LPEZ. Marc / Rodrigo. Aspects des relations financires franco-
suisses (1936-1946). ditions Payot. Chronos Verlag. Zrich. 2002.

MORCOS. Paul G. . Le secret bancaire face ses dfis: Liban, France, Suisse,
Luxembourg et Moyen-Orient: Terrorisme, Blanchiment, Corruption, Criminalit,
Fiscalit, Transparence, Technologie bancaire, Concurrence, Evasion de capitaux,
Confiance, Vie prive, Prosperit, Souveraint. ditions Bruylant - Bruxelles.
Beyrouth. 2008.

RAPPO. Aurlia Joyce. Le secret bancaire: Sa porte dans le temps, dans l'espace et
dans les groupes de societs. Staempfli Editions SA. Berne. 2002.

SCHAUFELBUEHL. Janick Maria. L'vasion fiscale : une longue tradition entre la
France et la Suisse

German Literature
EMCH / RENZ / ARPAGAUS. Urs / Hugo / Reto. Das Schweizerische Bankgeschft.
6. Auflage. Schulthess. Zrich. 2004.

HUG. Peter. Steuerflucht und die Legende vom antinazistischen Ursprung des
Bankgeheimnisses. Funktion und Risiko der moralischen berhhung des
Finanzplatzes Schweiz. In: J. Tanner & S. Weigel (Hrsg.), Gedchtnis, Geld und
Gesetz. Vdf Hochschulverlag AG. Zrich. 2000.

KELLER / MARTI. Dominic / Laurent. Eine Inhaltsanalyse von Schweizer und
internationalen Printmedien. IPMZ-Institut fr Publizistikwissenschaft und
Medienforschung der Universitt Zrich. Dokumentation. Zrich. 2003.

MERKI. Christoph Maria. Europas Finanzzentren, Geschichte und Bedeutung im 20.
Jahrhundert. Campus Verlag GmbH. Frankfurt am Main. 2005.

40
MUELLER. Peter F. . Wegleitung zum schweizerischen Bankgeheimnis: Grundlagen,
Rechtshilfe, Ausblick. Schulthess Polygraphischer Verlag AG. Zrich. 1998.

NOBEL. Peter. St. Galler Bankrechtstag 2009: Institutionengefge zum Finanzmarkt.
Stmpfli Verlag AG. Bern. 2010.

OESCH. Stephanie. Die organisierte Kriminalitt - eine Bedrohung fr den
Finanzplatz Schweiz?. vdf Hochschulverlag AG. Zrich. 2010.

WESPI. Florian. Schweizerisches Bankgeheimnis - quo vadis?. Universitt St. Gallen.
St. Gallen. 2009.
Mixed Language Literature
BERNASCONI. Paolo. Blanchiment d'argent et Secret Bancaire / Money Laundering
and Banking Secrecy: Rapport General / General Report, XIV
e
Congrs international
de droit compar / XIVth International Congress of Comparative Law. Kluwer Law
International. The Hague. 1996.

DIE MITARBEITERINNEN UND MITARBEITER DES BUNDESAMTES FR
JUSTIZ. Aus der Werkstatt des Rechts: Festschrift zum 65. Geburtstag von Heinrich
Koller / L'atelier de droit: Mlanges en l'honneur de Heinrich Koller: l'occasion de
son 65
me
anniversaire. Helbing & Lichtenhahn Verlag. Basel. 2006.
Articles
ARD. Tagesschau. Die Wut der Schweizer ber Peitschen und Kavallerie. Published
on the 04.08.2010 [online] http://www.tagesschau.de/wirtschaft/steinbrueck222.html
(last consulted on the 12.4.2012)

ARD. Tagesschau. Schweizer Politiker spricht von "Kriegserklrung". Published on
the 31.03.2012 [online] http://www.tagesschau.de/ausland/steuerdaten106.html (last
consulted 12.4.2012)

BASLER ZEITUNG. 10 Jahre Swissair-Grounding. Published on the 2. October 2001
[online] http://bazonline.ch/dossiers/wirtschaft/dossier2.html?dossier_id=1068 (last
consulted 25.5.2011)

BILANZ. SNB/Rechtsexperten finden Devisengeschfte von Hildebrand heikel.
Published on the 6.1.2012 [online] http://www.bilanz.ch/news/snbrechtsexperten-
finden-devisengeschaefte-von-hildebrand-heikel (last consulted on the 22.3.2012)

FAZ. FDP nimmt die Schweiz in Schutz. Published on the 03.04.2012 [online]
http://www.faz.net/aktuell/wirtschaft/haftbefehle-gegen-deutsche-steuerfahnder-fdp-
nimmt-die-schweiz-in-schutz-11706464.html

NZZ. Affre um SNB-Prsident Hildebrand spitzt sich zu. Published on the 5.1.2012
[online] http://www.nzz.ch/nachrichten/wirtschaft/aktuell/die_affaere_um_snb-
praesident_hildebrand_spitzt_sich_zu_1.14114692.html (last consulted on the
22.3.2012)

41

NZZ. Der Steuerwettbewerb in Europa blht. Published on the 18.2.2007 [online]
http://www.nzz.ch/2007/02/18/al/articleEXJXZ.html(last consulted on the 6.5.2012)

NZZ. Bundesrat widerspricht Blocher. Published on the 6.1.2012 [online]
http://www.nzz.ch/nachrichten/politik/schweiz/bundesrat_blocher_hildebrand_1.1415
7928.html (last consulted 10.3.2012)

NZZ. Peer Steinbrck oder die Lust am Brskieren. Published on the 18.3.2009
[online]
http://www.nzz.ch/nachrichten/politik/international/peer_steinbrueck_oder_die_lust_a
m_brueskieren_1.2216591.html (last consulted on 12.4.2012)

NZZ. Bund hat deutsche Fahnder im Visier. Published on the 1.4.2012. [online]
http://www.nzz.ch/nachrichten/politik/schweiz/bund-hat-deutsche-fahnder-im-
visier_1.16203013.html (last consulted 12.4.2012)

TAGES-ANZEIGER. Merz antwortet OECD: Nichts vom G-20-Auftrag gewusst.
Published on the 10.04.2009 [online]
http://www.tagesanzeiger.ch/schweiz/standard/OECDChef-schreibt-Merz-einen-Brief-
Er-habe-stets-gewarnt/story/26509420 (last consulted 06.05.2012)

TAGES-ANZEIGER. Villiger vergleicht UBS-Desaster mit Swissair-Grounding.
published on the 02.05.2012 [online]
http://www.tagesanzeiger.ch/wirtschaft/unternehmen-und-konjunktur/Villiger-
vergleicht-UBSDesaster-mit-SwissairGrounding/story/19639673 (last consulted
25.5.2012)

THE GUARDIAN. Switzerland moves to contain franc appreciation. Published on the
3.8.2011 [online] http://www.guardian.co.uk/business/2011/aug/03/switzerland-franc-
overvalued-intervention (last consulted on the 22.3.2012)

WOZ. Der Banker als Hilfssheriff. published on the 10.02.2005 [online]
http://www.woz.ch/0506/die-geldmaschine-ubs/der-banker-als-hilfssheriff (last
consulted on the 25.5.2012)
Other sources
CONFERENCE: "LE RAPPORT BERGIER 10 ans aprs", at the University of
Lausanne with Sbastien Guex, Marc Perrenoud, ex federal counsellor Ruth Dreifuss
and other experts, held at the 21
st
of March 2012 from 18:00 to 20:00.

42
7. Annex

Law excerpts (BKG)
(legally valid German version available at http://www.admin.ch/ch/d/sr/952_0/a47.html)

Art. 47

1 Mit Freiheitsstrafe bis zu drei Jahren oder Geldstrafe wird bestraft, wer vorstzlich:

a.
ein Geheimnis offenbart, das ihm in seiner Eigenschaft als Organ, Angestellter, Beauftragter
oder Liquidator einer Bank, als Organ oder Angestellter einer Prfgesellschaft anvertraut
worden ist oder das er in dieser Eigenschaft wahrgenommen hat;
b.
zu einer solchen Verletzung des Berufsgeheimnisses zu verleiten sucht.
2 Wer fahrlssig handelt, wird mit Busse bis zu 250 000 Franken bestraft.

3 Im Fall einer Wiederholung innert fnf Jahren nach der rechtskrftigen Verurteilung betrgt
die Geldstrafe mindestens 45 Tagesstze.

4 Die Verletzung des Berufsgeheimnisses ist auch nach Beendigung des amtlichen oder
dienstlichen Verhltnisses oder der Berufsausbung strafbar.

5 Vorbehalten bleiben die eidgenssischen und kantonalen Bestimmungen ber die
Zeugnispflicht und ber die Auskunftspflicht gegenber einer Behrde.

6 Verfolgung und Beurteilung der Handlungen nach dieser Bestimmung obliegen den
Kantonen. Die allgemeinen Bestimmungen des Strafgesetzbuches kommen zur Anwendung.

43

Map of OECD 2009
(taken from HANHARDT REDONDO / BRAILLARD / SCHWAMM / ARTIGOT. Secret
bancaire et place financire: le combat de la Suisse. 2009. p.16)

The Swiss Banking Secrecy: Ubi Abscondis?

Cargado por

Información del documento

Título original

Derechos de autor

Compartir este documento

Compartir o incrustar documentos

Opciones para compartir

¿Le pareció útil este documento?

¿Este contenido es inapropiado?

Copyright:

The Swiss Banking Secrecy: Ubi Abscondis?

Cargado por

Copyright:

The Swiss Banking secrecy:

También podría gustarte