Definition and Overview: What Are Swiss Banks?
Swiss banks are subject to a much different set of regulations and governance than the banks of most other countries in the world.
Discretion was always one of the most important things to Swiss banks. They always kept private the identities of their clients and the details of their clients’ banks accounts.
Changes to Swiss Bank Secrecy for U.S. Citizens
Legally in Switzerland, secrecy is still protected. Under the law in that country, Swiss banks are not allowed under normal circumstances to share information about an account holder or their accounts to anyone other than the account holder.
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However, this has been changing in recent times. After legal difficulties with the United States, Swiss banks have started to voluntarily disclose information to the U.S. government in exchange for certain guarantees and protections.
Tax Evasion Issues
One of the primary uses of Swiss banks by high-net-worth individuals was to hide assets from their country’s tax authorities.
Since Swiss banks would not disclose any information, people looking to commit tax evasion would often deposit large amounts of money in those accounts.
However, the U.S. government now has a much greater ability to obtain information from Swiss banks, and the period of using them primarily as an illegal tax haven seems to be drawing to a close for U.S. citizens.
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