In Defense of Famed Secrecy, Swiss Bankers Attack 'Myths.' (Column)
Whelpton, Eric, American Banker
BASLE, Switzerland -- To dispel some of what they call "myths" about Swiss banking and its famous numbered accounts, the big three Swiss banks -- Swiss Bank Corp., Swiss Credit Bank, and Union Bank of Switzerland -- have cooperated to produce a brochure explaining just what Swiss banks can and cannot do.
The pamphlet is frankly aimed at the United States, says Jorg Boller, head of public relations at Swiss Bank Corp., who led the team that put it together. Recent pressure on the Swiss banks and government to reveal more data to U.S. investigators on transaction here by American citizens and residents made it essential, he asserts, that "some misunderstandings be cleared up."
Not that the banks expect that their new tract will by itself change the Securities and Exchange Commission's interest in Switzerland. But, Mr. Boller says, by "separating fact from myth" -- the title of the brochure -- it may at least help explain why Swiss banks are not the secretive manipulators they are out to be.
In recent years, the SEC and U.S. courts have made repeated efforts, most notably in the case of commodities trader Marc Rich, to force Swiss banks to reveal more information on dealings the Americans feel were taboo under Swiss law. The Swiss refused.
"It is unrealistic to expect switzerland as a sovereign nation to change its fundamental laws to accommodate the wishes and needs of a foreign country, however much it may sympathize and agree with that country's objectives," the pamphlet says. It does not specifically mention the U.S. in this regard, but notes that tax evasion is a misdemeanor in Switzerland, whereas it is a more serious offense in the U.S. Disclosure Governed By '77 Treaty
What information will Swiss banks give to U.S. courts and regulators? Such dealings are governed by the 1977 Swiss-American "Treaty on Legal Assistance in Criminal Matters," which provides for help in the prosecution of organized crime. The SEC is seeking to beef up this treaty, and Swiss banking law is being changed to help meet this demand, including the formation of a bar to insider trading.
"While recognizing the threat that organized crime presents to every constitutional state, Swiss authorities have taken all precautions to restrict legal assistance to only those criminal matters punishable under Swiss law," the brochure says. Moreover, it adds, data provided by Swiss banks in such
cases can be used only in prosecution of those cases.
New legislation passed in 1983 strengthened the 1977 treaty by allowing assistance to be given in tax fraud cases involving Americans. …