According to SNB the persons not affected by an international request for administrative assistance whose data are to be transmitted to requesting authorities must also be informed in advance.
The background was a corresponding Recommendation of the FDPIC of 18 December 2017. The recommendation was directed against the practice of the FTA of informing only the persons formally affected by requests in the US administrative assistance. The other third parties appearing in the edited bank documents are “due to a lack of proximity to the subject matter of the dispute” only described as “indirectly affected” and thus as “not per se entitled to file a complaint” – and consequently not informed by the FTA (recommendation, p. 3).
The FTA rejected the recommendation of the FDPIC. The recommendation was not compatible with Switzerland’s obligation under international law to ensure an effective exchange of information. The FDPIC applied unsuccessfully to the Federal Department of Finance on the basis of Art. 27 para. 5 FADP to oblige the FTA to implement its recommendation. The FDPIC then filed an appeal with the FAC.
From the considerations of the FAC:
4.7 As an interim result, it can thus be stated that, in the present proceedings, the FDPA due to the special legal data protection regulations in the StAhiG as well as in the double taxation agreement between Switzerland and the USA (cf. below). merely as an aid to interpretation is applicable. In the following, therefore, the basic regulations of administrative assistance in tax matters, including their provisions on data protection, which the complainant is entitled to invoke on the basis of Art. 27 (1) of the Swiss Code of Obligations, are set out.
FDPA also monitored.
5.5 As an interim conclusion, it can be stated that third parties, i.e. persons who are not directly affected by the administrative assistance procedure, have the right, based on Art. 14 para. 2 StAhiG, to be informed as soon as their data is ready for transmission to a requesting tax authority. expected to be relevant within the meaning of Art. 4 para. 3 StAhiG and Art. 26 DBA CH-USA 96. If these are not likely to be relevant, the transfer of their data is inadmissible and their data must be segregated or made unidentifiable (Art. 17 para. 2 StAhiG). According to case law, the term “non-affected person” under Art. 4 para. 3 StAhiG is to be understood restrictively, i.e. those persons are to be protected who have nothing to do with the facts described in the request for administrative assistance and whose names appear purely by chance in the documents to be transmitted.
7. In summary, it can thus be stated that Persons not affected by a request for administrative assistance, i.e., third parties whose data are to be transferred to U.S. and other requesting authorities, are to be informed in advance, in principle on the basis of the legal protection to which they are entitled under the StAhiG and also on the basis of the DSG.. In cases in which the required information would involve disproportionate effort and the execution of administrative assistance would be rendered impossible or disproportionately delayed, the competent authorities must work out joint solutions in the sense of exceptions in an appropriate form, for example by means of directives or guidelines.
The ruling of September 3, 2019, published yesterday, is not yet legally binding. An appeal to the Federal Supreme Court is to be expected.