The terms bank customer secrecy and bank customer confidentiality denote a legal regime which prohibits banks from providing information about bank customers to any third party without the express consent of the account holder. Numerous countries, including Switzerland, Liechtenstein, Austria, Andorra, and the Bahamas, have some form of bank customer secrecy laws in place.
In Switzerland, the terms “bank secrecy” and “bank customer secrecy” refer to a set of laws designed to protect the privacy of bank customers. These laws prohibit banks from providing information about bank customers to any third party unless a criminal investigation which complies with Swiss law has been opened against an account holder. They were put in place during the 1930s with the primary purpose of protecting the assets of account holders from confiscation by oppressive governments.
The Automatic Exchange of Information (AEI) agreement which came into force in Switzerland at the end of 2017 brought an end to bank customer secrecy for account holders who are subject to foreign jurisdictions. Under this agreement, Swiss financial services providers are required to provide information about eligible account holders to the tax authorities of their country of jurisdiction. This information includes: Personal information including names, addresses and country of tax residence of account holders; Bank names and bank account numbers; Income, account balances, dividends, proceeds.
Swiss bank customer secrecy: The facts