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Switzerland sees surge in money laundering

Switzerland, on the ‘grey list’ of tax havens, saw a surge in suspected activities related to money laundering in 2008, with assets worth an all-time high of $1.65 billion involved in them.

After the world’s top 20 economies resolved to crack down on tax havens worldwide at a meeting in London last week, the Organisation for Economic Cooperation and Development (OECD) named Switzerland among countries not having substantially implemented international tax standards.

This classification put Switzerland on the ‘grey list’ of tax havens, but Switzerland reacted sharply to such descriptions and said it was not actually a ‘tax haven’.

However, the Swiss Federal Department of Justice and Police (FDJP) has said in a report that the number of Suspicious Activity Reports (SARs) in connection with money laundering jumped from 795 in 2007 to 851 last year.

This included nine related to suspected terror financing and involved assets worth over one million Swiss francs ($884,600).

“The increase was due mainly to the greater volume of reports from the banking sector, which reached a new record high. The total value of assets involved doubled to reach an all-time high of CHF 1.87 billion Swiss francs ($1.65 bn),” the FDJP said in a statement.

In 2008, the Money Laundering Reporting Office Switzerland (MROS) received 851 SARs, with nearly 67 per cent of them coming from the banking sector. Among them, most were related to investment fraud.

The statement noted that third on the list of offences was bribery related to individual corruption, which, due to their complexity involving numerous businesses, generated several SARs.

“Although the acts of corruption took place abroad, the suspected bribe money was deposited in Switzerland,” it added.

Interestingly, Opposition parties in India have said that assets worth about $1.5 trillion are stashed away in Swiss banks by Indian citizens.

The FDJP said that in the CHF 1.87 billion, three SARs totalling CHF 700 million ($620.5 million) are involved. Among them, two cases involved fraud while the other one was related to corruption.

This included a single report involving an asset value of 942,000 Swiss francs ($834,999) and the case was forwarded to the appropriate prosecuting authority, which subsequently dismissed the case.

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