In the NZZ Beno Hafner, a Swiss lawyer, is challenging the transmission by Category 2 banks of employee, ex-employee or 3rd party data for the ones who had very few connections or clients linked to the US. According to the Swiss data privacy officer, the US does not have an adequate data privacy. Hence a strong rational for the transfer of data should be established prior to the information crossing the Atlantic. Such a case can be built if there is a ‘prevailing public interest’, reason used by the banks to justify the transfer of names of people linked to undeclared US clients in their books. ‘Public interest’ has various meaning in the different Swiss courts. Number of employee growth or loss is part of companies’ life cycles and cannot be invoked to ground the data transfer, it then relates to private interest. Of public interest is the settlement of the tax dispute between the Swiss banks and the US.
The US Department of Justice and the Swiss Federal Department of Finance agreed to respect the mutual laws. not to deliver a few names of little significance should not be a material reason to stop the US Program and negotiations.
While the banks put forward the fact that the majority of employees have little to fear, it remains unclear what the US will do with the data it is collecting. However the US Department of Justice previously also prosecuted ‘small fish’. The model Non-Prosecution Agreement (NPA) received by the Category 2 banks shows that Swiss banks might have taken a naive stance in the resolution of the tax dispute.
As the last instance the Swiss Federal Court will have to statute on this issue.