Switzerland’s highest court has ruled that former private banker and whistleblower Rudolf Elmer did not breach banking secrecy law in a case that has garnered international attention.
The Federal Court rejected by three votes to two an appeal by Zurich prosecutors who were pushing for the country’s banking secrecy law to apply to whistleblowers wherever they are in the world.
The majority of the federal judges pointed out that Rudolf Elmer was no longer employed by a Swiss bank at the time of the events, Swiss news agency Keystone-SDA reported.
Elmer was the Chief Operating Officer of the Caribbean operations of the Swiss bank, Julius Baer, for eight years before being dismissed in 2002.
After his dismissal, Elmer sent threatening messages to bank employees and forwarded customer data to the media and tax authorities of several cantons and the federal government.
Only two judges upheld the view the view that the Julius Baer bank had delegated tasks to its subsidiary JBBT in the Cayman Islands, in which Rudolf Elmer worked. According to them, the Banking Act would also apply to third parties mandated by Swiss banks.
The case was seen as a test on whether the principle of Swiss banking secrecy could be enforced extra-territorially.
Bypassing bank secrecy
Swiss-regulated banks are legally bound to keep client information confidential, but whistleblowers have leaked account details to foreign authorities cracking down on tax evasion.
“It was made clear by the court that Swiss bank secrecy law is not applicable to banks in countries outside of Switzerland,” the former banker’s attorney, Ganden Tethong, told Reuters.
With this decision, the Federal Court confirmed the judgment handed down by the Zurich court in August 2016, which found Elmer guilty of threat and forgery of documents.
At the time, Elmer, who has made it his mission to erode the principles of Swiss banking secrecy, was given a suspended 14-month prison sentence.
The whistleblower has had multiple cases brought against him for sharing information about tax evasion, money laundering and other financial violations.
In 2016, Julius Baer paid $547 (CHF543) million in fines after the United States government filed criminal charges against the bank over tax fraud.
It also paid a fine of €50 (CHF57) million to the German government to avoid prosecution.