People’s Party wants banking secrecy enshrined in constitution

The Swiss are resisting EU pressure to relax banking secrecy laws Keystone

The Swiss People's Party is seeking to insulate banking secrecy from EU pressure by incorporating it into the constitution.

The right-wing party – one of the four in government – made the announcement at a media conference, at which there were also calls for Switzerland to break off negotiations with the European Union.

The move comes after days of speculation over whether the Swiss government is prepared to make concessions on banking secrecy in order to conclude a second series of bilateral agreements with the EU.

On Friday the leader of the Swiss negotiating team in Brussels said talks on the bilaterals had come to a standstill, mainly because of disagreements over banking secrecy.

The bilaterals – governing issues such as trade, labour and taxation – are seen as a politically acceptable alternative to EU membership.

“Not negotiable”

Although the Swiss government has stated on several occasions that banking secrecy is not negotiable, ministers are keen to conclude the second set of bilateral agreements. It is also official government policy to take Switzerland into the EU in the long term.

Brussels wants Bern to compromise on banking secrecy to ensure that Switzerland complies with EU legislation on the prosecution of tax evasion and money laundering.

But many sectors of Swiss society, including the Swiss People’s Party and large sections of the banking community, believe any change to the banking secrecy laws could harm Switzerland’s reputation as a safe place to invest.

People’s Party representatives demanded that the EU “keep its hands off banking secrecy”, and accused the Swiss government of entering into negotiations without understanding their consequences.

The People’s Party announced plans to launch a campaign aimed at enshrining banking secrecy in the Swiss constitution. A constitutional amendment of this kind would require a nationwide referendum.

Concern among bankers

The Swiss Bankers’ Association refused to comment specifically on the People’s Party move, but said it assumed the Swiss government would stick to its original mandate not to negotiate on banking secrecy when trying to strike a deal in Brussels.

“Financial privacy is not up for discussion,” Bankers’ Association spokesman, James Nason, told swissinfo. “I think there’s a danger that people lose sight of the real problem, which is the European Union trying to ram its own legislation down the throat of a non-member.”

Long tradition of banking secrecy

Switzerland’s banking secrecy laws have a long history. They were first incorporated into banking legislation in 1934, and since then attempts to weaken them have usually proved unsuccessful.

In 1985 Swiss voters rejected an initiative put forward by the Social Democrats aimed at restricting banking secrecy.

In 1998, however, legislation aimed at combating money laundering was introduced, requiring bankers to report all suspicious financial transactions to the authorities.

But Switzerland’s banking secrecy laws mean it continues to be out of step with the European Union on the prosecution of fiscal crime. EU negotiators have made it clear that Brussels expects a harmonisation of financial legislation, and that Switzerland should not expect to be a special case.

A statement from the Swiss government on the issue of banking secrecy is expected on Wednesday.

by Imogen Foulkes with agencies