The practitioner’s perspective

Legacy structures

For practitioners in Zurich, the transformation of the past fifteen years remains part of daily work. Legacy structures still appear regularly in advisory work, whether in succession cases, in the review of trusts and foundations established decades ago or in the due diligence for the acquisition of a family business. Typical examples include offshore companies holding bank accounts that were never declared in the beneficial owner’s home state, discretionary trusts whose settlors or beneficiaries were resident in states that treat such structures as transparent, and Liechtenstein foundations whose economic owners are unclear. Many of these structures were regularised during the years of voluntary disclosures. Others were dissolved without regularisation, and some remain in existence with an uncertain tax history.

The automatic exchange of information has not made such structures irrelevant. The Common Reporting Standard requires financial institutions to look through passive entities to their controlling persons, and trusts are reported with their settlors, trustees, protectors and beneficiaries. The historic question of whether assets were declared in earlier years may nevertheless arise when an heir discovers an old account, when a foreign authority opens an investigation on the basis of data received, or when a transaction requires a clean tax history. In such cases the adviser must determine which legal systems govern the tax consequences, whether limitation periods have expired, whether a voluntary disclosure is still possible, and what risks the client’s Swiss bank or fiduciary faces.

Criminal risk for advisers

The American cases showed that the risk was not confined to the clients. By August 2013 the Department of Justice had charged more than thirty banking professionals in connection with offshore accounts, and several Swiss bankers and advisers were later arrested when travelling abroad.¹ Several pleaded guilty, as the cases of Julius Bär and the Zürcher Kantonalbank illustrate. Other states followed the same approach. German prosecutors opened proceedings against employees of Swiss banks for aiding and abetting tax evasion, and French proceedings against UBS for laundering the proceeds of tax fraud continued for years.² Swiss advisers who continue to serve foreign clients therefore need to consider the criminal law of the client’s state of residence as well as Swiss law. Under Swiss law itself, the inclusion of qualified tax offences among the predicate offences to money laundering means that the knowing handling of assets derived from such offences exposes bankers and advisers to criminal liability in Switzerland.

Articles 271 and 273 of the Criminal Code

The other side of the problem lies in the Swiss blocking provisions. Article 271 of the Criminal Code penalises anyone who, without authorisation, performs acts on Swiss territory on behalf of a foreign state that are reserved to an authority. Article 273 penalises economic espionage, which includes making business secrets available to foreign authorities or organisations.³ Both provisions continue to restrict the cooperation of Swiss banks, their employees and their advisers with foreign authorities. They explain why the Federal Council had to grant authorisations under Article 271 before banks could deliver information to the Department of Justice in 2013, and why client data could reach the United States only through administrative assistance. The prosecution of Hervé Falciani for aggravated economic espionage shows that Article 273 remains a live instrument.

The Federal Supreme Court confirmed the scope of Article 271 in a case arising from the American tax dispute. The chairman of a Swiss wealth management company had transmitted 109 client files to the Department of Justice on a USB stick without authorisation. In its judgment 6B_216/2020 of 1 November 2021 the court held that the prohibition protects the sovereignty of the state by preventing the circumvention of official channels of assistance. Non-public information identifying third parties cannot be disposed of freely and must be transmitted through official channels. It is irrelevant that the data may already be present abroad if they are transmitted from Switzerland.⁴ For advisers who assist clients in voluntary disclosures abroad, in foreign proceedings or in internal investigations commissioned by foreign authorities, this jurisprudence imposes caution. The client may disclose his own data. Transmitting information about third parties, such as other clients, employees or intermediaries, may require either an authorisation from the competent federal department or the use of official channels.

In practice, therefore, the Zurich adviser operates between two legal orders that make opposing demands. The foreign state expects full cooperation and transparency, while Swiss law forbids certain forms of cooperation outside official procedures. Navigating this tension requires familiarity with the procedures for authorisation under Article 271, with the rules on administrative and mutual legal assistance, and with the practice of foreign authorities. Experience in cross-border mandates shows that many problems can be avoided when the client’s own disclosure is carefully separated from information concerning third parties, and when the Swiss bank is involved early enough to plan its own reporting obligations.

Notes

1. United States Department of Justice, “United States and Switzerland Issue Joint Statement Regarding Tax Evasion Investigations” (n. above). ↩
2. In 2019 the Paris criminal court convicted UBS of illegal banking solicitation and aggravated laundering of the proceeds of tax fraud and imposed a fine of 3.7 billion euros. The Court of Appeal reduced the total penalty to 1.8 billion euros in 2021. In 2023 the Cour de cassation upheld the conviction but found that the confiscation and damages had been calculated incorrectly. In September 2025 UBS closed the proceedings with a settlement of 835 million euros, which made a new trial on the penalties unnecessary: blue News, “France: UBS verse 835 millions d’euros pour régler un litige fiscal”, 23 September 2025, https://www.bluewin.ch/fr/infos/economie/france-ubs-verse-835-millions-d-euros-pour-r-gler-un-litige-fiscal-li.2884876. ↩
3. Swiss Criminal Code of 21 December 1937, SR 311.0, Article 271, https://www.droit-bilingue.ch/de-en/3/31/311.0-271-334.html, and Article 273, https://www.droit-bilingue.ch/de-en/3/31/311.0-273-336.html. Article 273 penalises anyone who makes a manufacturing or trade secret available to a foreign official agency, a foreign organisation, a private enterprise or their agents. ↩
4. Dominique Müller, Flavio Delli Colli and Susanne Brütsch, “Klarere Konturen für Art. 271 Ziff. 1 StGB?”, GesKR 2022/1, pp. 115–119, https://www.lenzstaehelin.com/fileadmin/user_upload/MUELLER_DELLI_COLLI_BRUETSCH_GesKR_01_2022_Klarere_Konturen_fuer_Art._271_Ziff._1_StGB_115-119.pdf. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.