Swiss banking secrecy: Myth or reality?

By Felix Egli and Fiona Gao Yue, VISCHER

We are often asked by Chinese clients and contacts what Swiss banking secrecy means exactly and whether it still applies.

Misleading term

The term itself is misleading as banking secrecy is protecting the privacy of the customers of the bank, rather than the secrets of the bank. It should more properly be called “bank customer secrecy”. But, as the term “banking secrecy” has been used for decades, we also use it here.

Felix Egli Senior Partner, Head of the China Desk VISCHER
Felix Egli
Senior Partner, Head of the China Desk

The legal concept

Banking secrecy is set out in article 47 of the Federal Act on Banks and Savings Banks of 1934. It reads as follows (unofficial translation):

Art. 47 Federal Act on Banks and Savings Banks

1 A custodial sentence of up to three years or a fine shall be awarded to those who intentionally:

a) disclose a secret which was entrusted to them or of which they had become cognisant due to their office or employment, in their capacity as an executive, employee, mandatee or liquidator of a bank, or as an executive or employee of an audit firm;

b) incite someone to breach such professional secrecy obligation.

2 Where the offender acts negligently, they shall be sanctioned by fine of up to 250,000 Swiss francs (US$270,200).

This law never has offered absolute protection in the case of criminal prosecution. However, criminal prosecutors of foreign states must apply for assistance in criminal matters under the Federal Act on International Mutual Assistance in Criminal Matters (IMAC) in order to obtain information that is protected by banking secrecy under Swiss law.

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Felix Egli is a senior partner and the head of the China Desk of VISCHER. Fiona Gao is an associate on VISCHER’s China Desk


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