Senate fears joining Schengen will compromise banking secrecy

Schengen abolishes border controls between signatory states and strengthens police cooperation Keystone

The Senate has expressed fears that government plans to join the European Union's Schengen agreement could erode Switzerland's banking secrecy laws. The cantons have already said signing up to the agreement would lead to an unacceptable loss of sovereignty.

The debate was the first time the government has defended its plans in parliament about negotiating a new set of bilateral agreements with the EU.

No vote was taken on the bilateral accords but parliamentarians entered into a heated debate, which focused on one of the issues – the possibility of Switzerland joining the Schengen agreement, which abolishes border checks and strengthens police cooperation.

The justice minister, Ruth Metzler, defended the government’s plans, saying Switzerland had to overhaul its criminal justice system, because crime had become increasingly international.

She added that Schengen was a key element in the international fight against crime, and that the government had seized the opportunity to have the agreement included in future talks with the EU.

But senators remained sceptical. They didn’t so much attack the government’s explorative talks with EU negotiators on the issue, but raised doubts about the possible outcome – especially if the laws and regulations included in the Schengen agreement (the so-called “Schengen acquis”) were to erode Switzerland’s banking secrecy laws.

The agreement included procedures for member states to assist each other in the fight against tax fraud, said Bruno Frick, a centre-right senator from canton Schwyz, and the chairman of the foreign affairs committee.

Frick said that, at present, the measure covers only indirect taxes, but the EU is set to expand the agreement to cover direct taxation and “that will be the end of our banking secrecy laws”.

Other speakers were concerned because, by signing up to Schengen, Switzerland would have to agree to the entire Schengen acquis including its future amendments, but – being not a member of the EU itself – would have no voice in shaping them.

In the same vein, Eugen David, a senator from canton St Gallen, said that while personally favouring full Swiss membership in the EU, he couldn’t tolerate a situation where the country would be “merely a colony”.

The concerns raised in the Senate are similar to those put forward two months ago by the conference of cantonal governments. Cantonal police departments, especially, are worried that membership of Schengen would pre-empt Switzerland’s plans to reform its system of judicial and police powers.

The government’s USIS programme (a German acronym meaning “examination of interior security matters in Switzerland”) should lead to a repartition of competences between federal and cantonal police and judicial institutions, if Metzler, who introduced it, has her way. But the programme has been delayed by the reluctance of cantonal bodies to relinquish some of their powers.

Cross-border cooperation between cantonal police forces and federal border police officers on one side, and their colleagues in neighbouring countries in the EU on the other, are currently based on bilateral agreements and “pragmatism”, in the words of André Baltensperger, secretary general of the conference of cantonal governments.

“In many ways, Swiss membership of Schengen would be an improvement on the present situation, but we need to know where the journey ends,” Baltensperger told swissinfo.

The EU has made it clear that third countries cannot participate in its computerised Schengen Information System (SIS) and centralised fingerprints archive (Eurodac) unless they become members of the Schengen agreement.

Currently, Norway is the only Schengen member outside the EU, while the UK and Ireland, while being EU member states, are not signatories to the Schengen agreement because they want to retain border controls.

Schengen is complemented by the Dublin agreement, which provides for a close cooperation in asylum policies.

by Markus Haefliger