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The Swiss have been surrounded for decades by mountains of snow and dirty money.
That’s why it is indeed welcome news that Washington has been able to pry open Switzerland’s bank secrecy laws this week. UBS will hand over information on the accounts of 4,450 wealthy Americans.
But this should be just the beginning and the next big target should be Singapore, according to Washington-based attorney Jack Blum.
“As a result of the pressure on Switzerland, a lot of the client bank accounts have been shifted off to Singapore. UBS said [last year] it will cooperate in giving up the names, so billions fled and it all appears to be heading to Singapore,” he said in a recent telephone interview.
Singapore is the “preferred destination” for Wall Street denizens, according to Singaporean opposition politicians. Who knows? Maybe some of Madoff’s billions are there.
Bankers are accessories
Singapore maintains that it has weeded out criminals. But that’s what the Swiss said too. There is no way a bank can determine who is behind the person or entity with the numbered bank account. It’s an excuse trying to mask the fact that secrecy havens are willing accessories to crimes.
“Crooks set up offshore corporations in the British Virgin Islands, get a bank account in Singapore or in the Pacific islands or in a trust in the Isle of Man and there’s no way to crack through all of that at the moment,” said Blum.
This is why the UBS deal must be only the beginning of a global crackdown. Governments worldwide have incurred enormous debts to pull the world back from its economic brink, due to banking malpractice, and tax evaders must be pursued to help ease the burden on all taxpayers.
Secrecy invented in 1934
The Swiss invented the secret, numbered bank account to help Jews and others hide money from the Nazis. But the Nazis used this service too because secrecy enables despots, drug cartels and tax evaders of every race, religion and nationality to evade taxes and detection.
Swiss bank accounts have facilitated corruption worldwide and involved high-profile cases in Pakistan, Africa and South America. The late Yasser Arafat stashed $300 million safely away in Switzerland, and safely out of the reach of the Palestinian people to whom it belonged. Likewise, every tinpot dictator, terrorist organization, kickback artist, tax cheat and drug dealer in the world likely has a Swiss gnome protecting his money from police, other crooks, tax authorities and ex-wives.
UBS nickname: used to be smart
This UBS precedent was the result of investigations which followed revelations from a UBS whistleblower about the bank’s “offshore” marketing techniques such as smuggling diamonds in toothpaste tubes for clients.
But UBS is only the tip of the iceberg.
Last week, allegations were made in an Italian court by the daughter of the late Gianni Agnelli, whose family owns Fiat which is Italy’s largest industrial empire, that there was US$1 billion hidden in Lugano banks that her mother was hiding from her.
This dirty money business has gone on for years and there are trillions sloshing around in dozens of countries from Liechtenstein to the Channel Islands, Cayman Island, Vanuatu, Austria plus others.
The Swiss must now also force Credit Suisse and other financial intermediaries to cooperate with foreign tax and police authorities. This bank also came under fire in the 1990s when the World Jewish Congress discovered that there was no effort to help find the heirs to accounts of Jews who were murdered or who disappeared in the Second World War. The money was being used by the bank.
The Swiss have been targeted for some time and now Singapore plus others must become the focus. Ending bank secrecy will reap many benefits for the world such as finding out if public officials and politicans are on the take.
Singapore’s future as a financial centre [Part I] [Part II] [Part III]