Prodi criticises Swiss banking secrecy

Romano Prodi has criticised Switzerland's banking secrecy Keystone Archive

The president of the European Commission, Romano Prodi, has said Switzerland should give up its banking secrecy laws to prevent money laundering.

In an interview with the Sunday newspaper “NZZ am Sonntag”, Prodi said current banking secrecy laws were “outdated” and protected “money stemming from unknown sources, which could include dirty funds”.

Prodi added that Switzerland should abstain from joining the European Union (EU) if it considers banking secrecy as essential.

“If Switzerland does not want to join the EU because of the importance it attributes to banking secrecy, then I think that country should not join the union,” Prodi said.

“I consider banking secrecy as an instrument, and not a fundamental value such as Switzerland’s neutrality,” Prodi added. “While values cannot be changed, it is possible to get rid of an illfitting instrument.”

Swiss Bankers Association

The EU has repeatedly called on Switzerland to lift its banking secrecy to help it track EU citizens who attempt to evade tax on interest income by placing their savings abroad.

However, the demand has been systematically rejected by the Swiss Bankers Association (SBA).

The SBA argues that banking customer confidentiality, which is anchored in Swiss legislation, is not negotiable. In its view, Switzerland has provided legal assistance in criminal matters for many years. Moreover, funds of criminal origin are not protected by Swiss bank customer confidentiality.

EU legislation

EU legislation states that after a seven-year period, there will be a general obligation to report all cross-border interest income paid to private individuals resident in the Union.

For instance, a German or Belgian who earns income from an account in a French bank must report that income to tax authorities.

by Jeff Nottage with NZZ am Sonntag