American in Spain

Swiss Banking No Longer Secret

June 30, 2008
Switzerland Unlocked!

Switzerland has finally given in to the fear of terrorism. From 1934 to June 30, 2008, Swiss banks would not and could not, under Swiss law, give information about where their clients' money came from to third parties, even foreign governments or the Swiss government itself. Switzerland is a member of the Financial Action Task Force (FATF), an inter-governmental body developing and promoting policies to combat money laundering and terrorist financing. Starting on July 1, 2008, the FATF will be requiring name, address, account number/IBAN of the originator to be specified for all money transfers into a Swiss bank account. From now on, any foreign government can request all information about money transfers going to and coming out of any Swiss bank account. All European Union countries have already been implementing this FATF regulation since January 1, 2008. Personally, I'm torn on how I feel about this. Obviously reducing terrorism and catching terrorists is a good thing. And so often on Law & Order, suspects are found to be guilty because large deposits in the suspect's account match up with large withdrawals in a known bad guy's account. But the paranoid Libertarian in me thinks that, as long as I pay my taxes, the government (mine and all others) has no business knowing what I do with my money.

Although I investigated Swiss banking as a solution to my multi-currency lifestyle, in the end it turned out to not be worth the hassle and fees. So really, I've never really had this privacy that Swiss banking clients will cease to have on July 1, but the fact that it was there as an option made me happy.

Of course the "If you're doing nothing wrong..." argument that is always used to take away personal liberties applies here. The hole in that argument is that "wrong" is defined by who is in power at any given moment. If it becomes "wrong" to be a Jew or Christian or atheist or homosexual as it has in the past, then, well, too bad for the unlucky ones. I suspect that, over the course of the next few centuries of human history, the "pro-individual liberties, anti-powerful government" wisdom of the founders of the US government will be proven several more times. Power will be abused, the people will revolt and decide that a powerful government is bad, peace will prosper, people get comfortable and want more protection from government, ....and repeat.

It saddens me to see such a pillar of individual privacy as the Swiss Bank crumbling to fear.