A person entering Switzerland with suitcases laden with cash of questionable origin and heading to one of its private banks is an outdated cliché that needs updating.

The perception that Swiss banking laws enable individuals to commit financial crimes no longer holds up under closer scrutiny. Yet for international media, it is a notion that is hard to drop, as reports from an international network of journalists revealing information obtained by a data leak from one of Switzerland’s biggest banks, show. 

Their criticism is directed at what was once a pillar of Swiss finance, namely its banking secrecy. However, the way Swiss private banks have been operating for a number of years now is a far cry from before 2009 when they first joined the OECD's Global Forum on Transparency. 

Swiss banking secrecy practically disappeared with the introduction of the Automatic Exchange of Information (AEOI) to which the Swiss committed in 2018. 

Some professionals working in the sector are puzzled that the reports focus so heavily on Switzerland's banking secrecy and Credit Suisse also points to the «historical» nature of the cases featured in the reports in its statement. 

Today, the only information that remains protected applies to accounts of Swiss residents, Swiss banking secrecy expert Robert Vogler, tells finews.com in an interview.

Delaware or Frankfurt

«If I wanted to hide money today I would go to Delaware, London or Frankfurt,» Vogler adds.

Switzerland has made significant efforts to do away with its old banking ways by adhering to international tax transparency frameworks. In 2014 it instituted with U.S. authorities the Swiss FATCA Act, requiring banks to report information regarding all accounts held by U.S. taxpayers.

Furthermore, the OECD Global Forum said the country is «largely compliant» in relation to its legal and regulatory framework as well as in its implementation in practice.

Hypocrisy and Competition

Currently, the OECD notes that in relation to the AEOI, its legal framework around tax transparency is «in place but is in need of improvement.»

An important factor to bear in mind with these reports is that Switzerland has the most assets under management in offshore accounts worldwide.

«Hypocrisy and competition from other financial centers could also be fueling the banking secrecy myth,» Vogler says.

Reporting by Jade Cano and Marco Babic