Switzerland named as capital of banking secrecy
01 Feb 2018

Switzerland has emerged as the global capital of banking secrecy in the latest Financial Secrecy Index (FSI), published this week.

Tax transparency and anti-corruption campaigners Tax Justice Newtwork, which compiled the list, found that: “Switzerland has delayed the implementation of automatic information exchange, and in 2017 lawmakers attempted to stop it altogether with countries they deemed ‘corrupt’.”

“As the FSI demonstrates, countries like Switzerland are fundamental to the flow of illicit financial funds, such as the proceeds of corruption. Switzerland’s attempts to stop transparency for funds they receive from countries with perceived high levels of corruption will simply make tackling corruption in those countries harder.”

The FSI, which is published every two years, assesses the secrecy of financial centres and the impact of that secrecy on global financial flows.

The criteria for assessing countries includes factors such as whether companies and trusts have to reveal their beneficial or true owners, or the extent to which jurisdictions’ rules comply with anti-money laundering standards (the Financial Action Task Force’s 40 Recommendations).

A spokesman from Switzeland’s State Secretariat for International Financial Matters, SIF, told KYC360: “Switzerland obtained a good score from the Global Forum on Transparency and Exchange of Information for Tax Purposes, on the exchange of information, and from the FATF on combating money laundering and terrorist financing.”

“The evaluation criteria of the Global Forum and the FATF are very strict, objective and are applied to all countries. This is the reference.”

After Switzerland, the US and the Cayman Islands took second and third place respectively. Other jurisdictions in the top ten group include Hong Kong, Germany and Guernsey.

“An estimated $21 to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in secrecy jurisdictions around the world,” Tax Justice Network said on its website.

“Africa is a major net creditor to the world – but its assets are in the hands of a wealthy élite, protected by offshore secrecy; while the debts are shouldered by broad African populations,” it explained.

“Yet all rich countries suffer too. For example, European countries like Greece, Italy and Portugal have been brought to their knees partly by decades of tax evasion and state looting via offshore secrecy.”

Read more:

Financial Action Task Force report: Progress in Switzerland’s AML/CFT regime

Switzerland: Watchdog launches investigation into initial coin offerings, issues guidance

Should conditions be attached to the return of Abacha’s loot to Nigeria?

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