Press Release of the Swiss Federal Supreme Court
Judgment of 15 July 2011 (2C_127/2010)
Disclosure of UBS customer data by FINMA to the US Department of Justice ruled lawful
On February 18, 2009, FINMA, the Swiss Financial Market Supervisory Authority, ordered that the data of 255 UBS customers be disclosed to the US Department of Justice. In its public deliberation of July 15, 2011, the Swiss Federal Supreme Court ruled that FINMA’s actions were lawful. In doing so, it reversed the ruling handed down by the Swiss Federal Administrative Court and upheld FINMA’s order.
FINMA ordered that the data of 255 UBS customers be disclosed to the US Department of Justice as a protective measure pursuant to articles 25 and 26 of the Banking Act. In doing so, it proceeded on the assumption that if this data hadn’t been disclosed, the US Department of Justice would have filed an indictment against UBS, which would arguably have caused the bank’s ruin and consequently have had serious repercussions for the Swiss economy.
The Swiss Federal Administrative Court, with which the UBS customers had filed a claim in the first instance, ruled their appeal admissible on January 5, 2010 and declared FINMA’s decision to be unlawful. FINMA in turn appealed this ruling at the Swiss Federal Supreme Court. In its public deliberation of July 15, 2011, the Swiss Federal Supreme Court’s Second Public Law Division ruled the appeal admissible.Articles:
The Swiss Federal Supreme Court first confirmed the legal opinion of the Swiss Federal Administrative Court according to which articles 25 and 26 of the Swiss Banking Act do not provide sufficient legal grounds for encroaching on banking secrecy. These provisions enable interference in the management of a bank in order to protect it against heavy debt overload or liquidity problems, but they do not allow banking secrecy to be suspended at the expense of customers.
FINMA had good reason to suppose that an indictment against UBS was imminent in February 2009 due to serious violations of US laws. FINMA could also assume without violating the law that such an indictment would have led to the bankruptcy of the bank which in turn would have caused serious and virtually uncontrollable economic repercussions for Switzerland.
To avert serious imminent risks to fundamental legally protected interests, government authorities may, in the absence of a specific legal foundation, act on the basis of the “general police powers clause”. According to today’s ruling of the Swiss Federal Supreme Court, this also applies to FINMA, as far as the authority acts in agreement and with the consent of the Swiss Federal Council. Since FINMA had compelling reasons to believe that not relinquishing the customer data to the US Department of Justice would have seriously impaired Switzerland’s financial markets and have led to serious repercussions for the Swiss economy, the action taken by it was shown to be lawful.
Contact: Sabina Motta, Deputy of the General Secretary
Tel. 021 318 97 16; Fax 021 323 37 00
NB: The judgment will be published on our website as soon as the legal considerations have been redacted: www.bger.ch / "Rechtsprechung gratis" / "Weitere Urteile ab 2000" (Insert the reference of the judgment into the search field 2C_127/2010). When exactly the legal considerations will be available is not yet known.
Swiss Court Says Right to Give U.S. Bank Data (Reuters 7/15/11).