With an unprecedented rise in the number of
whistleblowing cases in the Swiss banking sector, Saverio Lembo
and Christophe Hensler of Bär & Karrer consider the
far from simple application of the legal
Since the 2008 financial crisis, many governments have
focussed on the prosecution of taxpayers with foreign
undeclared bank accounts, and of banks, bankers and other
professionals. As the global market leader in the cross-border
private banking business, Switzerland is under unprecedented
pressure. Its banking secrecy is targeted by neighbouring
countries and the US. In their effort to crack down on tax
evasion, foreign governments have been helped by whistleblowers
from the Swiss banking sector, who have passed on or sold them
bank clients' details. Whistleblowing is not a new phenomenon
in the Swiss banking industry, but it has increased
significantly over the past few years. In some instances,
foreign governments have also obtained information from
individuals convicted abroad of assisting taxpayers to evade
tax and who cooperate to receive a reduction in their sentence.
This article will provide an overview of the main Swiss
criminal law provisions, which prohibit the theft and
disclosure of banking information for foreign authorities or
courts, and look at how they have been applied to
whistleblowers in recent cases by Swiss courts and
Overview of Swiss criminal law provisions
Unauthorised obtaining of data
Article 143 of the Swiss Criminal Code (SCC) prohibits the
unauthorised obtaining of electronic data, also known as data
theft or data espionage. It reads as follows (unofficial
Whoever, with the intention of procuring himself or a third
party an unlawful gain, takes, for himself or a third party,
data which is recorded or transmitted electronically or in a
similar way, and which is not intended for him and was
specially protected against unauthorised access, shall be
sentenced to imprisonment not exceeding five years or to a
The data protected by article 143 SCC is all information
processed, stored and transmitted by way of a computer.
Data is specially protected when it is not intended to be
accessible to the person who stole or intercepted it . The
protective measures, which can include both software protection
(such as passwords and encryption) and physical protection
(such as locking server rooms and limiting access to
buildings), must make access sufficiently difficult.
Breach of manufacturing or business secrecy
Article 162 SCC was enacted to protect the individual
interest of individuals wishing to maintain confidentiality. It
reads as follows (unofficial translation):
Whoever discloses a manufacturing or business secret which
he or she was legally or contractually bound to safeguard,
whoever uses such disclosure for his or her own profit or the
profit of a third party, shall be sentenced, upon complaint of
the aggrieved party, to imprisonment not exceeding three years
or to a monetary penalty.
Article 162 SCC defines manufacturing or business secrets as
facts relevant to the economic result achieved or aimed at by a
company; for example, manufacturing processes, plans, suppliers
and customer lists. It is a criminal offence prosecuted only if
the aggrieved party files a criminal complaint.
The purpose of article 273 SCC is to protect the territorial
sovereignty of Switzerland and its economic independence and
security, by prohibiting the disclosure of trade or business
secrets to foreign authorities and private persons. It reads as
follows (unofficial translation):
"Whistleblowing in the Swiss
banking sector has increased significantly over the
past few years"
Whoever seeks to discover a manufacturing or business
secret, to make it accessible to a foreign official or private
agency, or a foreign private enterprise, or their agents, any
person who makes a manufacturing or business secret accessible
to a foreign official or private agency, or a foreign private
enterprise, or their agents, shall be sentenced to imprisonment
not exceeding three years or to a monetary penalty, or in
serious cases to imprisonment for not less than one year. An
imprisonment sentence can be combined with a monetary
Article 273 SCC does not protect all kind of information,
but only confidential information. The scope of this notion
covers any data and business facts: (i) that are known only by
a restricted group of persons, of economic importance and
difficult to access from abroad; (ii) that the interested
persons intend to keep secret; and (iii) which, from a Swiss
standpoint, need to remain secret.
The information that a company receives from its customers
falls within the scope of article 273 SCC. As such, identities
of bank customers are protected.
Under a ruling of the Swiss Supreme Court, a secret,
according to the meaning of article 273 SCC, may also cover
information related to business practices that are in breach of
foreign laws, such as tax or antitrust laws.
The information protected by article 273 SCC should also
have a sufficient nexus with Switzerland. Swiss courts and
authorities have, in this respect, a large degree of discretion
as to what constitutes a sufficient nexus with Switzerland.
Article 273 SCC is prosecuted ex officio but, due to its
political nature, any prosecution under this provision is
subject to the prior approval of the Swiss Federal Council
(article 66 of the Criminal Federal Authorities Organisation
Act, CFAOA). The latter has a broad discretion in its decision
regarding the opportunity to initiate proceedings. Under
article 23 (1) (h) CPA, the Swiss federal prosecuting
authorities (Office of the Attorney General of Switzerland,
OAGS) have exclusive jurisdiction to prosecute.
Switzerland enshrined banking secrecy as a criminal offence
in article 47 of the Banking Act (BA).
First, it is important to note that article 47 BA only
applies to the disclosure of information by bank directors,
employees or auditors that conduct banking activities in or
from Switzerland in an entity that has been licensed as a Swiss
Bank by the Swiss Financial Market Supervisory Authority
Article 47 (1) BA reads as follows (unofficial
Shall be sentenced to imprisonment not exceeding three years
or a monetary penalty, anyone who willfully:
a. Discloses a secret that is entrusted to them in their
capacity as body, employee, appointee, or liquidator of a bank,
as body or employee of an audit company or that was brought to
their knowledge in such capacity; or
b. Induces a third person to violate professional
Article 47 (2) BA adds that 'persons acting by negligence
will be sentenced to a fine not exceeding SFr250,000'
Swiss law does not provide a statutory definition of banking
secrecy. However, the term may be defined as the professional
discretion which banks, their employees or individuals
belonging to any of their bodies must observe with respect to
financial and personal affairs of their clients during the
exercise of their profession.
The duty of confidentiality resulting from article 47 BA
extends to all data that the bank has acquired knowledge of in
connection with its business relationship with the client
(including the mere existence of the banking relationship).
Contrary to popular belief, Swiss banking secrecy is not
absolute. It can be waived first by the client, who is the
so-called master of the secret. Further, article 47 (5) BA
provides that provisions of federal and cantonal legislation
regarding the duty to inform authorities and give testimony in
court overrides Swiss banking secrecy. Swiss banking secrecy
can also be waived under certain circumstances by a judicial or
administrative authority in civil, administrative or criminal
This long-running saga began in 2005 and is ongoing.
The whistleblower is a Swiss citizen who was chief operating
officer of a Swiss bank in the Cayman Islands until his
dismissal in 2002. He was still in possession of backup copies
of data and started to disclose information about undeclared
accounts to Swiss media and tax authorities in 2005.
On September 27 2005, the Zurich General Attorney's Office
opened an investigation against him on suspicion of violating
banking secrecy. He was arrested and held in custody for 30
days. He came into prominence as a whistleblower later in 2008
when WikiLeaks' website published confidential banking
documents provided by him.
On January 17 2011, two days before going on trial, he held
a press conference with a WikiLeaks representative and publicly
handed over two CD-ROMs allegedly containing additional data
about offshore bank accounts.
On January 19 2011, the Zurich District Court sentenced him
to a SFr7,200 fine with probation for a period of two years for
threats, multiple counts of attempted coercion and violation of
banking secrecy. Both the whistleblower and the attorney
general appealed against the judgment.
On the same day of the first instance judgment, the
whistleblower was arrested on renewed suspicion of violation of
Swiss banking secrecy for the information disclosed two days
earlier and was taken into custody on the grounds of urgent
suspicion and risk of collusion. He was finally released from
custody on July 25 2011.
At the appeal hearing, on November 17 2011, the Zurich
Supreme Court decided that it lacked clear evidence to rule on
appeal and asked the attorney general to complete his
investigation. It was not clear whether the CD-ROMs contained
data of bank clients in Switzerland or only in the Cayman
Islands. This question is of importance as the whistleblower
denies the charges against him, and argues that he should not
be prosecuted under Swiss banking secrecy laws because his data
came from the Cayman Islands subsidiary.
The attorney general conducted additional investigations
and, on December 10 2013, amended the indictment.
The new trial before the Zurich District Court began one
year later, on December 10 2014, but was stayed on the first
day after the whistleblower collapsed. The trial is due to
continue in 2015.
Swiss banking data sold to Nordrhein-Westfalen
The whistleblower in this case, a former employee of a Swiss
bank, provided confidential data on German clients, and
internal banking documents, to an accomplice who sold them for
€2.5 million ($2.8 million) to the German state of
Nordrhein-Westfalen. The amount was shared with the
The OAGS started criminal proceedings on February 6 2010,
following the revelations by the German press on the purchase
of bank information by the tax authorities. On September 14
2010, the OAGS arrested and took into custody the accomplice.
The latter committed suicide a few days later while in custody.
The whistleblower was arrested in the Czech Republic on
September 15 2010 and extradited on November 18 2010 to
Switzerland where he was taken into custody. He was released
from custody on February 17 2011 and alternative measures were
ordered against him.
Upon request from the whistleblower, the OAGS decided on
September 6 2011 to continue the prosecution by way of
so-called accelerated proceedings. The latter explained that he
started stealing confidential data from his employer "to kill
time, out of passion and historical interest".
In its decision dated December 15 2011, the Swiss Criminal
Federal Court ratified the sanctions proposed by the OAGS and
sentenced the former employee to 24 months suspended
imprisonment with a probation period of two years and a fine in
the amount of SFr3,500.
Swiss banking data sold to German tax authorities
On August 22 2013, a former employee of a Swiss bank was
found guilty by the Swiss Criminal Federal Court of aggravated
economic espionage, money laundering, breach of business
secrecy and violation of banking secrecy. He was sentenced to
36 months imprisonment, of which 18 months suspended
imprisonment with a probation period of two years. Also, the
Court ordered the seizure of his assets to guarantee a
compensatory claim by the Swiss authorities worth
Between October and December 2011, the whistleblower, an IT
specialist who was an interim employee of a Swiss bank in
Zurich, searched and collected client data in different
internal systems of the bank following the incentive of a
German intermediary. He copied data of wealthy German and Dutch
clients during his working hours. He sent 15 emails from his
work computer to his private mailbox with attachments
containing client names, addresses, account numbers, opening
dates, account balances and currencies. He then filtered the
data on German clients with more than 100,000 euros, Swiss
francs, pounds sterling or US dollars and, in December 2011,
sent a sample of the information (on approximately 100 clients)
to his accomplice in Berlin, a retired German tax inspector.
Later on February 2012, he met his accomplice in Berlin and
handed over data on 2,700 German clients of the bank for
transfer to the German tax authorities.
The whistleblower had agreed with his accomplice on a reward
of €1.1 million for the collection and delivery of client
data. In March 2012, the whistleblower received €200,000
in cash in Berlin. He had intended to use the rest of the money
to pay off taxes he owed in Germany.
In May and June 2012, he sent a new sample of information on
42 Dutch clients to his accomplice with the intention to sell
them to the Dutch tax authorities. They intended to sell these
data for €400,000 but the Dutch tax authorities refused to
buy tax information from an anonymous source.
On July 24, 2012 the bank filed a criminal complaint and the
Zurich Attorney General Office opened an investigation against
the whistleblower and his wife. On the same day, the
whistleblower was arrested and taken into custody. On August 3
2012 the Zurich Attorney General Office transferred the case to
the OAGS who opened an investigation for economic espionage,
violation of banking secrecy and money laundering.
The whistleblower admitted that he copied and sold client
data from the Swiss Bank to the German tax authorities through
an intermediary in Berlin. Upon his request, the OAGS decided
on May 17 2013 to continue the prosecution by way of
In its decision dated August 22 2013, the Swiss Criminal
Federal Court found the former employee guilty of the charges
mentioned above and ratified the sanctions proposed by the
OAGS. On the question of the adequacy of the 36 months
imprisonment, the Swiss Criminal Federal Court referred to its
previous decision of December 15 2011 (the Nordrhein-Westfalen
case) and the fact that 24 months imprisonment and a fine in
the amount of SFr3,500 were at the lowest admissible limit. In
the present case, the Swiss Criminal Federal Court considered
that a sentence of 36 months imprisonment was adequate.
Swiss banking data handed over to US authorities
On July 21 2014 a former employee of a Swiss bank was found
guilty by the OAGS of economic espionage and sentenced to a
fine of SFr6,000 with a probation period of two years.
The whistleblower was a registered investment advisor with
the US Securities and Exchange Commission. From 1995 to August
2008, he was employed by a Swiss bank as a private banker. From
February 2009, he worked as an independent investment
He was working closely with a fellow former banker at the
Swiss bank and arranged to travel to the US and meet with
clients to discuss their investments in undeclared accounts. He
was arrested in a hotel in Miami on November 8 2010, after
meeting with a client (who was cooperating with the US
The whistleblower started cooperating with US officials,
providing information about his former US clients who evaded
income taxes and his former Swiss colleagues who assisted
On December 22 2010, he pleaded guilty to conspiring to
defraud the US and was sentenced on November 18 2011 to sixty
months probation and ordered to return to the US at least once
a year to assist the Justice Department in its ongoing
investigations of illegal cross border banking.
On July 3, 2012 the Zurich General Attorney's Office opened
an investigation against the whistleblower on suspicion of
violation of banking secrecy. On April 10 2013 it handed over
the investigation to the OAGS.
During a hearing before the OAGS, the whistleblower
explained that the US authorities obtained information by
confiscating his laptop, his smartphone and work documents
during his arrest in 2010. However, he also admitted that he
later handed over financial statements of two undeclared US
clients. These were former clients that he introduced to
another bank. The two financial statements that he handed over
to the US authorities came from the other bank. He also
admitted that he had been interrogated by the US authorities,
where he was confronted with the depositions of 12 former
clients and was requested to confirm information already in the
hands of the US authorities.
In its decision, the OAGS considered that there was no
violation of banking secrecy with respect to the information
obtained from his laptop and smartphone as the disclosure was
the result of coercive measures and because he did not disclose
the information on his own. With respect to the two financial
statements that he later handed over to the US authorities,
they came from another bank of which the whistleblower had
never been an employee or representative. It follows that he
was not subject to the Banking Act and Article 47 BA was not
applicable to this case. The OAGS dismissed the charge of
violation of banking secrecy. However, even though the
whistleblower was not subject to banking secrecy for the two
financial statements, the OAGS considered that these documents
represented business secrets and were thus protected by Article
273 SCC. Moreover, the content of the financial statements was
known only by the clients, the bank and the external investment
advisor and so they had a legitimate interest for the content
to remain undisclosed to third parties. Therefore, the
whistleblower was found guilty of economic espionage under
Article 273 (2) SCC.
A so-called state of necessity, to justify the
whistleblower's actions, was rejected by the OAGS. Although the
whistleblower was required to cooperate with the US authorities
to receive a reduction in his sentence, the OAGS considered
that the higher interests of the State, in particular the Swiss
economy, and the interest of the clients to business secrecy
clearly overrode the interest of the whistleblower to benefit
from a more lenient sentence.
Disclosures on French politician
On December 19 2014, a former employee of a Swiss bank was
found guilty by the Swiss Criminal Federal Court of economic
espionage and violation of business secrecy. He was sentenced
to two years suspended imprisonment with a probation period of
themselves to civil and criminal sanctions, not to
mention reputation damages"
The whistleblower, who was fired from the Swiss bank at the
end of 2009, accepted to be heard by the French Customs
services in February 2013 and to testify on tax evasion. In
April 2013, he was heard by the judges in charge on an
investigation of the Swiss bank accounts of a former French
budget minister. He also alleged that he had a list of French
politicians who had undeclared accounts in Switzerland. On June
14 2013, he provided the French media with an internal document
from the Swiss bank (which turned out to be forged).
On June 17 2013, the bank filed a criminal complaint with
the OAGS against the former employee for theft, forgery and
violation of professional and business secrecy.
The whistleblower was arrested on July 5 2013 when he came
back to Switzerland and was held in custody for two and a half
months. He finally admitted to the charges of economic
espionage and violation of business secrecy. The OAGS decided
to dismiss the charges of violation of professional secrecy and
The trial before the Swiss Criminal Federal Court on
December 19 2014 was a closed-door hearing in order to preserve
confidential information. According to Swiss media, the
whistleblower was found guilty of economic espionage and
violation of business secrecy. He was, however, not convicted
of violating banking secrecy because he was not working as a
banker, but at the bank's concierge service for wealthy
clients, which is a separate entity of the Swiss bank licensed
by the Finma.
Swiss banking data handed over to France and Spain
The OAGS announced on December 11 2014 that it had filed a
bill of indictment with the Swiss Criminal Federal Court
against an IT specialist of a Swiss bank for aggravated
economic espionage unauthorised obtaining of data, breach of
business secrecy and violation of banking secrecy.
The whistleblower is suspected of having, since February
2008, handed over banking data to Lebanese banks, to the French
Tax Investigations Office in Paris and to other foreign
The whistleblower started transferring client account data
to his own data carriers in October 2006 in order to compile
personal and financial data on the bank's clients and thus
obtain complete client profiles.
The OAGS learned in April 2008 that a man and a woman had
attempted to sell banking data in Lebanon and decided to open
an investigation in May 2008. The OAGS discovered the names of
the two individuals later in December 2008 and interrogated the
whistleblower about his activities in Lebanon. The latter fled
Switzerland during the night following the first hearing.
The whistleblower, who is a Franco-Italian national, took
refuge in France. Swiss authorities requested urgent mutual
legal assistance from the French authorities. He was arrested
in January 2009 and questioned during that month. House
searches were conducted at his domicile in France and various
objects were seized. Based on the data seized, the attorney
general of Nice decided to open his own investigation against
alleged French tax evaders.
The whistleblower was released and rearrested in Barcelona
in the summer of 2012 under an international arrest warrant
issued by Switzerland. On May 8 2013 a Spanish court ruled
against his extradition to Switzerland on the grounds that
violating banking secrecy laws was not a criminal offence in
On December 11 2014 the OAGS submitted the bill of
indictment to the Swiss Criminal Federal Court. The trial is
due to take place in 2015.
A rocky path for whistleblowing cases
Whistleblowing in the Swiss banking sector has increased
significantly over the past few years, although the cases
presented in this paper are probably only the tip of the
iceberg. Investigations on whistleblowing are often lengthy
because of the difficulty in determining if data was stolen or
disclosed. In addition, the investigations are usually kept
confidential in order to safeguard the interests of the master
of the secret.
The cases in this paper also show the influence of
jurisdiction considerations on the prosecution of
whistleblowers. The OAGS has exclusive jurisdiction to enforce
Article 271 and 273 SCC, but prosecutions are often initiated
by cantonal prosecuting authorities for violation of banking
secrecy and are later transferred to the OAGS.
Imprisonment sentences are often lenient, and reduced to a
suspended imprisonment. One explanation is that the most cases
use accelerated proceedings, where the whistleblower has
admitted to the criminal offences and accepted the civil
claims. The role of the court is therefore limited to accepting
or rejecting the plea agreement between the attorney general
and the whistleblower.
Finally, the cases discussed show that, under Swiss law,
whistleblowers expose themselves to civil and criminal
sanctions, not to mention reputation damages. So far, apart
from very few exceptions, the Swiss legislator has not enacted
laws protecting whistleblowers.
Partner, Bär & Karrer
T: +41 58 261 57 00
F: +41 58 263 57 40
Saverio Lembo heads Bär & Karrer's white
collar crime practice group, as well as the litigation
and arbitration team of the Geneva office.
He has extensive experience in white collar crime,
commercial and financial litigation, international
judicial assistance (civil and criminal), arbitration
and insolvency. During recent years, he has been
involved in a number of complex commercial litigation
proceedings, has served as a party representative or
arbitrator in various domestic and international
commercial arbitrations and has assisted clients in
Swiss and foreign criminal proceedings.
Lembo's practice also extends to pharmaceutical
litigation, inheritance law, employment matters and
enforcement of foreign judgments and awards.
Since 2012, the International Who's Who lists him
among the world's leading practitioners in the areas of
Business Crime Defense, Asset Recovery Lawyers and
Commercial Litigation. Since 2010, The Legal 500 lists
Lembo among the leading individuals in Switzerland in