Swiss Cabinet rejects banking secrecy initiative

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The Swiss parliament has been urged by the cabinet to reject the initiative to maintain banking secrecy for domestic private clients. Switzerland’s tradition of banking secrecy has been under pressure in recent years.
This week, the Swiss government has dismissed calls in favour of domestic banking secrecy in the country’s constitution. Within its written message that was sent to parliament, which must now debate the issue ahead of a nationwide vote, the cabinet said that the private sphere of taxpayers was already sufficiently protected and the initiative risked facilitating tax evasion. The cabinet also stated that the initiative would negatively impact the fight against money laundering and terrorist financing.

The parties behind the initiative hope to ban the automatic exchange of client data between Switzerland and other jurisdictons. Instead of automatically transferring data, they suggest that courts can decide when there is a need to transfer client information to tax authorities or not. Currently, banks can only pass information to legal authorities in case of proven tax fraud, the supporters seek to expand the power of the courts.