In view of a recent data leak showing that Credit Suisse bank accepted money from illicit sources, the European People’s Party (EPP) has called on the EU to “re-evaluate Switzerland as a high-risk money-laundering country” and add it to the list of nations at high risk for financial crime.

ANALYSIS: How the latest banking scandal has damaged Switzerland’s reputation

Credit Suisse bank held tens of billions of euros of dirty money for decades, a new cross-border media investigation claimed Sunday. 

The investigation was coordinated by the Organised Crime and Corruption Reporting Project (OCCRP), which unites 47 different media outlets worldwide including France’s Le Monde and The Guardian in Britain.

What is the EU blacklist? 

Created in December 2017, it lists countries that are allowing tax evasion by corporations and individuals. Such schemes enable rich foreigners to avoid paying taxes in their own countries.

The goal of this list is to “shame” tax haven nations into reforming their systems by bringing them up to the EU standards.

‘Swissleaks’: The Credit Suisse scandal explained

The 28 EU finance ministers drew up the lists — that followed several scandals including Panama Papers and LuxLeaks — in the hopes of “naming and shaming” countries into better combating tax evasion by multinationals and wealthy individuals.

What would it mean for Switzerland to be placed on this list? 

For Swiss authorities, being placed on the list has few direct implications but would result in increased diplomatic pressure to implement domestic changes. 

Blacklisted countries face only limited sanctions, consisting of freezing them out of European aid or development funding.

Indeed, Switzerland is no stranger to this list: in 2017, the country was placed on it  because “it intentionally attracted foreign investors by allowing corporations and wealthy individuals to pay a low, lump-sum tax on the money they kept in Swiss banks”.

However, Switzerland was removed from the list in 2019 because that year Swiss voters accepted a legislation which introduced major changes in the Swiss tax system by ending some preferential tax schemes and replacing them with new regulations which are in line with international standards.

This legislation introduced major changes in the Swiss tax system by ending some preferential tax schemes and replacing them with new regulations which are in line with international standards. 

This tax reform, which will enter in force in 2020, means the Swiss are now compliant with EU demands.

Does the notorious Swiss banking secrecy still exist?

It depends. For Swiss residents who do not hold double nationality, the bank-client confidentiality still exists.

ANALYSIS: Is Switzerland actually a tax haven?

But for foreigners, banking secrecy is a thing of the past, as Switzerland now cooperates with the EU and other nations in the exchange of their foreign clients’ financial information.

In fact, many banks are now reluctant to work with overseas clients.