“Swiss banks must verify your identity and won’t accept your business if they think it is illegal, says Ken Wassell, CEO of Los Angeles, California-based Offshore Company, a firm that aids its customers in overseas financial services. “About five percent of applications a year are turned down because of possible fraud,” says Wassell.

It doesn't stop there. James Nason, spokesman for the Swiss Bankers Association, adds that Swiss banks must not only verify your identity but also verify the source of the funds you are putting in the bank. “And besides that,” says Nason, “the beneficiary of the funds must also be positively identified.”

That’s not to say there isn’t secrecy in having a Swiss bank account. Any Swiss banker today who reveals your information without your consent risks prison time by law. And there is secrecy when it comes to issues like inheritance or divorce. It’s up to plaintiffs to prove someone has a bank account in Switzerland, if they want access to it through a lawsuit.

There are, of course, exceptions to the secrecy rule, especially concerning crimes such as gun running and drug trafficking. Swiss banks are forbidden by law to accept money which they know might be as a result of a crime.

And when it comes to names, the so-called secret numbered accounts in Swiss banks are not completely secret.

"Yes, banks can set up an account by number only," says Nason," but you will have to go through the same process to open the account as a named account—at greater expense. Your name will be known to several upper management types in the bank and there are records of ownership."

Origins Of Secrecy

The concept got its start in the 18th century, when a group called The Great Council of Geneva passed a law in 1713, preventing banks from sharing information about their clients.