Swiss privacy regulator reacts to US detention of banker’s children

23 August 2012

Switzerland’s data protection watchdog has forbidden the country’s banks to give the US authorities any further personal information about their employees.

Several Swiss banks, notably HSBC, Julius Baer and Credit Suisse, have handed over large amounts of such information to American officials investigating alleged tax offences by the banks’ wealth advisors in recent months. Many of the employees concerned have protested and begun litigation to stop the disclosure. At least five such actions are in progress: two against HSBC Private Bank and three against Credit Suisse.

It was an incident in the US several weeks ago that appears to have prompted the Swiss federal data protection commissioner Hans-Peter Thuer to take this action. In May, the two teenage children of a Geneva wealth manager flew into a US airport on a visit to their grandparents. According to newspaper Tribune de Geneve, police officers at the airport immediately detained the children and questioned them for six hours about their father’s work and current whereabouts. The Tribune’s source – an unnamed Swiss lawyer – claimed the children were held incommunicado and their grandparents, who were waiting for them at the airport, were not told where they were.

The story has made bank employees even more reluctant to travel to the US, though 90 per cent of them are not asset managers or wealth advisors and have never contacted US clients. According to the Tribune, some Swiss lawyers are even advising bank employees not to leave their country for fear of the US’s wide network of extradition treaties.

Thuer said he has always doubted whether the disclosures to the US Department of Justice (DoJ) were lawful, although they were officially encouraged by the Swiss federal government itself in an announcement of 4 April this year. Finance Minister Eveline Widmer-Schlumpf said there was no alternative, and that cooperating with the US authorities was the only way to avoid ‘destroying workplaces’. The Swiss State Secretariat for International Financial Matters also provided assurances that the banks would be acting within the law.

In a letter sent to the banks and their trade associations this week, Thuer warned that he has launched an inquiry to check the legality of their disclosures to the US DoJ. The banks must now provide him with a full account of employee data they have already sent to the US DoJ, and their reasons for passing on highly personal information, such as correspondence. In the meantime, they are forbidden to forward any more employee information to the US.

The Swiss prosecutor’s office is reportedly unwilling to take criminal action against the banks, despite formal complaints. But Alec Reymond and Douglas Hornung, the lawyers representing the HSBC and Credit Suisse employees, said the disclosures were illegal. Marcel Niggli, a law professor at Fribourg University, agreed.



Tribune de Geneve (in French)

The Local



Article Search

Browse jurisdictions by clicking on the map regions below

© 2012 Society of Trust & Estate Practitioners