Swiss Bank Project (1)

7/24/2019 Swiss Bank Project (1)

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A PROJECT ON

SWISS BANK

In The Subject

CBM

Submitted By

Dhwani Rajyau!u

A"#$

M%C&m Pa!t'I (Ban)in and *inance+

,nde! The -uidance &.

P!&.% OBEROI SIR

T&

,ni/e!0ity O. Mumbai

*&!

Ma0te! &. C&mme!ce P!&!amme (Seme0te!'I+

In

Ban)in and *inance

1ea!2 3"45'46

S7KM8S

NARSEE MONJEE CO99E-E O* COMMERCE AND ECONOMICS

7I9E PAR9E (W+:M,MBAI';"""56


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E7A9,ATION CERTI*ICATE

This is to certify that the undersigned have assessed and evaluated the project

on


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DEC9ARATION B1 T?E ST,DENT

() *h#ani +ajyaguru student of ,.om part-(/ ( n an"ing and inance) +oll%o'$03)

hereby declare that the project titled


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Ac)n&w>edment

roject has al#ays been fun learning e&perience) but #ith the gro#ing age) at this master

level) it surely demands corporate and depth approach.

( #ould li"e to than"s ,r.!beroi-rof of financial ,

( #ould also than" the ,.om department of narsee ,onjee ollege of commerce and

economics #ho gave me the opportunity to #or" on this project #hich provided me #ith lot

of insight and "no#ledge of my current curriculum and industry as #ell as practical

"no#ledge

ould sincerely than" our coordinator ,r.arish sharma for constant guidance over the

project

( #ould also li"e to than" the library staff of narsee monjee college of commerce and

economics for e7uipping me #ith boo"s) journals and maga8ines for this project

ould also li"e to than" my friend and fello# students #ho helped me in the cause of

project.


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INDE@2

S!% n&% T&=ic0 Pae n&

4 Eecuti/e 0umma!y

3 Swi00 nati&na> ban) # Re0=&n0ibi>ity &. SNB

; Othe! Maj&! ban)0 &. Swite!>and

5 Acui0iti&n and me!e!

6 Swi00 ban)in act 46;

O..'0h&!e taati&n

$ Swi00 &. 0h&!e =!i/ate ban)in

Swi00 ban) acc&unt ad/antae

4" Ca0e 0tudy 2 b>ac) m&ney

44 9i0t &. b>ac) m&ney h&>de!


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9:9;T(overnments around the #orld) especially in 9urope and the ;4$) have stepped

;p their efforts to reclaim their citi8ens? money from #hat they perceive to be @ta&

avens? or simply @uncooperative jurisdictions?. 4#it8erland is considered to be

!ne of them and #ill have to accept ne# !9* model ta& rules allo#ing foreign

Ta& authorities to gain access to information on their clients? ban" accounts #here

They believe that their citi8ens have placed money in 4#iss ban"s. This is

articularly #orrisome as regards 9; clients as #e estimate that undeclared

,oney from them accounts for around 25A of 4#iss private-ban"ing assets. The

ig T#o 4#iss ban"s) redit 4uisse and ;4) have invested heavily in e&tensive

!nshore operations as a precaution against the ris" of ta& rules being modified.The ban"s in our universe of coverage that loo" most at ris" are Bulius aer)

4arasin and 9> (nternational) but they could alleviate or temper ris"s by pro-

actively developing onshore strategies or by ac7uiring even more e&posed ban"s

that might come under greater pressure. e have trimmed our 4!T valuations

$nd price targets by) on average) CA for the ta&ation problems) but have not

$ltered our recommendations. e retain our ;= rating on 9> (nternational

rice target' 16.D) reduced from 1E.D/ and a %9;T+$F rating on the

!thers.


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The Swi00 Nati&na> Ban) (SNB +2

(t is the central ban"of 4#it8erland) and so is therefore responsible for the monetary policy

of the nation of 4#it8erlandand also for the issuing of 4#iss francban"notes

The ban" formed as a result of the need for a reduction in the number of ban"s of issue)

#hich numbered 5 sometime after 1326. (n the 13EC revision of the ederal onstitution it

#as given the tas" to oversee la#s concerning the issuing of ban"notes. Then in 13D1 the

ederal onstitution #as re-revised again to entrust the onfederation #ith sole rights to

issue ban"notes. The %ational an" Fa##as enforced during 16 Banuary 1D06) and the

%ational ban" began business activities during 20 Bune 1D0E) and is thought then founded

sometime during either 1D06 or 1D0E) 4% itself states founding #as during 1D0E.

4ometime during orld ar (1D1C-1D1E/) the ban" #as instructed to release notes of a

small denomination) for the first time) by the ederal ouncil of 4#it8erland.

The undesratdevalued the 4#iss ranc during 1D6) and as a result) there #as made

available to the %ational ban") an amount of monies) #hich the ban" subse7uently stored in a

Ghrungsausgleischsfondsreserve for the future) for usage in situations of emergency.

*uring 1DDC the an" #as described as a joint-stoc" company acting under the

administration and supervision of the onfederation) had eight branches and t#enty sub-

branches #ithin cantons. The governing board had overall e&ecutive management of the

%ational ban") #ith supervision entrusted to its shareholders) the ban"sH council) the ban"sH

committee) its local committees and auditing committee. There #ere three members of the

governing board) #ho together decided the monetary policy of the %ational ban". To#ards

the last months of 1DD) the number of employees numbered 566.

ith the inception of $rticle DD of the ederal onstitution) during ,ay 200C) the %ational

ban" achieved formal independence.

$s of 2015 the %ational ban" #as privately o#ned) #ith the majority of shares belonging to

cantons and ban"s of cantons) and the smaller remainder in the possession of private

individuals. 4hares of the 4% e&isted #ithin 4(: 4#iss 9&changefrom 1D0E on#ard.
https://en.wikipedia.org/wiki/Central_bankhttps://en.wikipedia.org/wiki/Switzerlandhttps://en.wikipedia.org/wiki/Monetary_policyhttps://en.wikipedia.org/wiki/Switzerlandhttps://en.wikipedia.org/wiki/Swiss_franchttps://en.wikipedia.org/wiki/Banknotehttps://en.wikipedia.org/w/index.php?title=National_Bank_Law&action=edit&redlink=1https://en.wikipedia.org/wiki/World_War_Ihttps://en.wikipedia.org/wiki/Federal_Council_(Switzerland)https://en.wikipedia.org/wiki/Federal_Council_(Switzerland)https://en.wikipedia.org/w/index.php?title=W%C3%A4hrungsausgleischsfonds&action=edit&redlink=1https://en.wikipedia.org/wiki/Joint-stock_companyhttps://en.wikipedia.org/wiki/Cantonshttps://en.wikipedia.org/wiki/Cantonshttps://en.wikipedia.org/wiki/SIX_Swiss_Exchangehttps://en.wikipedia.org/wiki/Switzerlandhttps://en.wikipedia.org/wiki/Monetary_policyhttps://en.wikipedia.org/wiki/Switzerlandhttps://en.wikipedia.org/wiki/Swiss_franchttps://en.wikipedia.org/wiki/Banknotehttps://en.wikipedia.org/w/index.php?title=National_Bank_Law&action=edit&redlink=1https://en.wikipedia.org/wiki/World_War_Ihttps://en.wikipedia.org/wiki/Federal_Council_(Switzerland)https://en.wikipedia.org/w/index.php?title=W%C3%A4hrungsausgleischsfonds&action=edit&redlink=1https://en.wikipedia.org/wiki/Joint-stock_companyhttps://en.wikipedia.org/wiki/Cantonshttps://en.wikipedia.org/wiki/Cantonshttps://en.wikipedia.org/wiki/SIX_Swiss_Exchangehttps://en.wikipedia.org/wiki/Central_bank


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Echane !ate0 2

The %ational ban" made an announcement on 6 4eptember 2011) of its intention to address

changes in the value of the 4#iss ranc to the 9uro) specifically) of the value of the ranc

falling belo# 1.2 to the 9uro. $ cap #as placed on e&change-rates I12J in order to ta"e

measures to stem the development of a possible recession. The ban" stated the 1.2 e&change

value #as defendable as the ban" could potentially proceed to mint enough ban"notes to

control the rate sufficiently.I1J

Re0=&n0ibi>itie0

The basic governing principles of the %ational ban" are contained #ithin $rticle DD of theederal onstitution) #hich deals #ith matters of monetary policy.I1CJThere are threenumbered factors concerning principles e&plicitly mentioning the %ational ban") of fouraltogether sho#n #ithin the $rticle. The 4% is therefore obliged by constitutional statutela# to act in accordance #ith the economicinterests of 4#it8erland)I15Jaccordingly) the primefunction of the %ational ban" is'to pursue a reliable monetary policy for the benefit of theSwiss economy and the Swiss people.

Ca0h 0u==>y and di0t!ibuti&n

The %ational an" is entrusted #ith the note-issuing privilege. (t supplies the economy #ith

ban"notes that meet high standards #ith respect to 7uality and security. (t is also charged by

the onfederation #ith the tas" of coin distribution.
https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-12https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-EMMA_THOMASSON_.26_CATHERINE_BOSLEY-13https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-EMMA_THOMASSON_.26_CATHERINE_BOSLEY-13https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-Swiss_National_Bank-14https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-Swiss_National_Bank-14https://en.wikipedia.org/wiki/Economichttps://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-15https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-12https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-EMMA_THOMASSON_.26_CATHERINE_BOSLEY-13https://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-Swiss_National_Bank-14https://en.wikipedia.org/wiki/Economichttps://en.wikipedia.org/wiki/Swiss_National_Bank#cite_note-15


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Ca0h>e00 =ayment t!an0acti&n0

(n the field of cashless payment transactions) the %ational an" provides services for

payments bet#een ban"s. These are settled in the 4#iss (nterban" learing 4(/ system via

sight deposit accounts held #ith the %ational an".

In/e0tment &. cu!!ency !e0e!/e0

The %ational an" manages currency reserves. These engender confidence in the 4#iss

franc) help to prevent and overcome crises and may be utili8ed for interventions in the foreign

e&change mar"et.

*inancia> 0y0tem 0tabi>ity

The %ational an" contributes to the stability of the financial system by acting as an arbiter

over monetary policy. ithin the conte&t of this tas") it analyses sources of ris" to the

financial system) oversees systemically important payment and securities settlement systems

and helps to promote an operational environment for the financial sector.

Inte!nati&na> m&neta!y c&&=e!ati&n

Together #ith the federal authorities) the %ational an" participates in international monetary

cooperation and provides technical assistance.

Ban)e! t& the C&n.ede!ati&n

The %ational an" acts as ban"er to the 4#iss onfederation. (t processes payments on

behalf of the onfederation) issues money mar"et debt register claims and bonds) handles the

safe"eeping of securities and carries out money mar"et and foreign e&change transactions.

Stati0tic0

The %ational an" compiles statistical data on ban"s and financial mar"ets) the balance of

payments) the international investment position and the 4#iss financial accounts.

M&neta!y =&>icy


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The 4% pursues a monetary policy serving the interests of the country as a #hole. (t must

ensure price stability) #hile ta"ing due account of economic developments. ,onetary policy

affects production and prices #ith a considerable time lag. onse7uently) it is based on

inflation forecasts rather than current inflation. The 4%?s monetary policy strategy consists

of three elements' a definition of price stability the 4% e7uates price stability #ith a rise in

the national consumer price inde& of less than 2A per year/) a medium-term conditional

inflation forecast) and) at operational level) a target range for a reference interest rate) #hich

is the Fibor for three-month investments in 4#iss francs.

-ene!a> Meetin &. Sha!eh&>de!0

The >eneral ,eeting of 4hareholders is held once a year) as a rule in $pril. !#ing to the

4%?s public mandate) the po#ers of the 4hareholders? ,eeting are not as e&tensive as in

joint-stoc" companies under private la#.

Ban) C&unci>

The an" ouncil oversees and controls the conduct of business by the 4#iss %ational an"

and consists of 11 members. 4i& members) including the resident and


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Othe! maj&! ban)0 &. Swite!>and

4#iss an" orporation is a large integrated financial services company located in

4#it8erland. rior to its merger) the ban" #as the third largest in 4#it8erland #ith over

00 billion of assets and 11.E billion of e7uity.

Throughout the 1DD0s) 4 engaged in a large gro#th initiative) shifting its focus from

traditional commercial ban"ing into investment ban"ing in an effort to match its larger 4#iss

rival redit 4uisse. $s part of this strategy) 4 ac7uired ;4-based investment ban" *illon

+ead K o. as #ell as Fondon-based merchant ban" 4.>. arburg in the mid-1DD0s. 4

also ac7uired hicago-based rinson artners and !Honnor K $ssociates. These

ac7uisitions formed the basis for a global investment ban"ing business.

(n 1DD3) 4 merged #ith ;nion an" of 4#it8erland to form ;4 the largest ban" in

9urope and the second largest ban" in the #orld. The companyHs logo) #hich featured three

"eys) symboli58ing Lconfidence) security) and discretionL) #as adopted by ;4 after the

1DD3 merger. $lthough the combination of the t#o ban"s #as billed as a merger of e7uals) it

7uic"ly became evident that from a management perspective) it #as 4 that #as buying

;4 as nearly 30A of the top management positions #ere filled by legacy 4#iss an"

professionals. Today) #hat #as 4 forms the core of many of ;4Hs businesses) particularly

;4 (nvestment an".
https://en.wikipedia.org/wiki/Swiss_franchttps://en.wikipedia.org/wiki/Swiss_franc


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A!e00i/e acui0iti&n0 (4"F4$+

The former 4#iss an" To#er off of ifth $venue in %e# =or" ity opened in 1DD0.

4#iss an" began the 1DD0s as the #ea"est of the Lig ThreeL 4#iss ban"s but by the end of

1DDE #ould be the driving force behind the merger #ith ;nion an" of 4#it8erland. 4

had been impacted by losses on its real estate investments and a series of minor controversies)

despite the ban"Hs historically conservative posture. eginning in the 1D30s) 4 along #ith

its 4#iss peers began to embrace a more aggressive strategy to "eep up #ith competitors in

the ;4) Bapan) >ermany and the ;M. The ban" signaled its ne# posture in 1DD0 #hen it

opened its ne# ;4 head7uarters) 4#iss an" To#er) a 2D floor building on CDth 4treet)

adjoining 4a"s ifth $venue.

4 shifted its focus from traditional commercial ban"ing to#ard investment ban"ing #ith

an emphasis on building its trading operations. To bolster its trading initiative) in 1DD2) 4

ac7uired !Honnor K $ssociates) a hicago-based options trading firm) #ith an e&pertise in

financial derivatives. !Honnor #as founded in 1DEE by mathematician ,ichael >reenbaum

and #as named for 9dmund 9d/ and illiams ill/ !Honnor. The !Honnor brothers had

made a fortune trading grain on the hicago oard of Trade and founded a irst !ptions) a

clearing house business. The !Honnors provided >reenbaum) #ho had run ris" managementfor irst !ptions) #ith the capital to start his o#n firm. 4 had established a strategic


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relationship #ith !Honnor) #hich #as the largest mar"et ma"er in the financial options

e&changes in the ;4) beginning in 1D33. !Honnor had been loo"ing to partner #ith a larger

financial institution and in 1D3D entered into a currency joint venture #ith 4 that proved to

be the first step to#ards a sale of !Honnor to 4. ollo#ing the merger) !Honnor #as

combined #ith 4Hs money mar"et) capital mar"et and currency mar"et activities to form a

globally integrated capital mar"ets and treasury operation. $ number of !Honnor e&ecutives

#ere brought into "ey positions #ithin the ban" in an attempt to cultivate a more

entrepreneurial culture at 4

4 ac7uired >ary . rinsonHs rinson artners in 1DDC to bolster the ban"Hs ;4 asset

management business.

4 spent ;4N2 billion to assemble an investment ban"ing franchise through the

ac7uisitions of 4.>. arburg in 1DD5 and *illon) +ead K !. in 1DDE to form arburg

*illon +ead.

Me!e! with ,ni&n Ban) &. Swite!>and

$ggressively pushing ahead its various ac7uisitions) ;4 #as mired in a series of

entanglements #ith activist shareholders #ho #ere critical of ban"Hs relatively conservative

management. ,artin 9bner) through his investment trust) M


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that resulted in the replacement of ;4Hs chairman) +obert 4tuder. 4tuderHs successor ,athis

abiallavetta #ould be one of the "ey architects of the merger #ith 4.

The combined ;4 logo incorporated ;4Hs name #ith 4Hs Lthree "eysL symbol.

!n *ecember 3) 1DDE) ;nion an" of 4#it8erland and 4 announced an all stoc" merger.

$t the time of the merger) ;nion an" of 4#it8erland and 4#iss an" orporation #ere the

second and third largest ban"s in 4#it8erland) respectively) both trailing redit 4uisse.

*iscussions bet#een the t#o ban"s had begun several months earlier) less than a year after

rebuffing redit 4uisseHs merger overtures.

Acui0iti&n hi0t&!y

4#iss an" orporation) prior to its merger #ith ;nion an" of 4#it8erland #as the result of

the combination of do8ens of individual firms) many of #hich date to the 1Dth century. The

follo#ing is an illustration of the companyHs major mergers and ac7uisitions and historical

predecessors

Swi00 Ban) C&!=&!ati&n

merged 13DE/

asler K

OPrcher

an"verei

n

est. 1330/

asler anv"erein

est. 1356 as

an"verein)

renamed in 13E2/

OPrcher

an"verein

est. 133D/

2 asler *epositenban"

est. 1332/

4ch#ei8 ;nion ban"


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est. 133D/asler andelsban"

est. 1362) ac7. 1DC5/

!Honnor

est. 1DEE) ac7. 1DD2/

rinson artners

est. 1D3D originally division of

irst hicago orporation started

c. 1D31) ac7. 1DDC/

arburg *illon +ead

merged 1DDE #ith 4-arburg under 4 o#nership/

4. >. arburg K o.

est. 1DC6) ac7. 1DD5

to form 4-arburg/

*illon) +ead K o.

est. 132) ac7. 1DDE/

Swi00 Ban)in Act &. 4#;'

an" secrecy #as codified in 4#it8erland by the 1DCFederal Act on Banks and Savings

Banks Swiss Banking Act of 193/ follo#ing a public scandal in rance) #hen , abien

$lbertin denounced ta& evasion by eminent rench personalities) including politicians)

judges) industrialists) church dignitaries and directors of ne#spapers) #ho #ere hiding their

money in 4#it8erland. e called these men of La particularly tic"lish patriotismL) #ho

Lprobably are una#are that the money they deposit abroad is lent by 4#it8erland to

>ermanyL. The eugeotbrothers and ranQois oty)of the famous perfume family) #ere on

his list. 4ince then) 4#iss ban"shave ac7uired #orld#ide celebrity due to their numberedban" accounts) #hich critics such as $TT$%>! alleged only help legali8ed ta& evasion)

money launderingand more generally the underground economy.

;nder the 4#iss principle of ban" secrecy)privacy is statutorily enforced) #ith 4#iss la#

strictly limiting any information shared #ith third parties) including ta& authorities) foreign

governments or even 4#iss authorities) e&cept #hen re7uested by a 4#iss judgeHs subpoena.

o#ever ban"ing is not strictly anonymous since under its ban"ing la# all 4#iss ban"

accounts) includingnumbered ban" accounts) are lin"ed to an identified individual. This la#
https://en.wikipedia.org/w/index.php?title=Fabien_Albertin&action=edit&redlink=1https://en.wikipedia.org/w/index.php?title=Fabien_Albertin&action=edit&redlink=1https://en.wikipedia.org/wiki/Tax_evasionhttps://en.wikipedia.org/wiki/Patriotismhttps://en.wikipedia.org/wiki/Germanyhttps://en.wikipedia.org/wiki/Peugeothttps://en.wikipedia.org/wiki/Fran%C3%A7ois_Cotyhttps://en.wikipedia.org/wiki/Fran%C3%A7ois_Cotyhttps://en.wikipedia.org/wiki/Swiss_bankhttps://en.wikipedia.org/wiki/Numbered_bank_accountshttps://en.wikipedia.org/wiki/Numbered_bank_accountshttps://en.wikipedia.org/wiki/ATTAChttps://en.wikipedia.org/wiki/Money_launderinghttps://en.wikipedia.org/wiki/Underground_economyhttps://en.wikipedia.org/wiki/Privacyhttps://en.wikipedia.org/wiki/Privacyhttps://en.wikipedia.org/wiki/Subpoenahttps://en.wikipedia.org/wiki/Subpoenahttps://en.wikipedia.org/wiki/Numbered_bank_accounthttps://en.wikipedia.org/wiki/Numbered_bank_accounthttps://en.wikipedia.org/w/index.php?title=Fabien_Albertin&action=edit&redlink=1https://en.wikipedia.org/w/index.php?title=Fabien_Albertin&action=edit&redlink=1https://en.wikipedia.org/wiki/Tax_evasionhttps://en.wikipedia.org/wiki/Patriotismhttps://en.wikipedia.org/wiki/Germanyhttps://en.wikipedia.org/wiki/Peugeothttps://en.wikipedia.org/wiki/Fran%C3%A7ois_Cotyhttps://en.wikipedia.org/wiki/Swiss_bankhttps://en.wikipedia.org/wiki/Numbered_bank_accountshttps://en.wikipedia.org/wiki/Numbered_bank_accountshttps://en.wikipedia.org/wiki/ATTAChttps://en.wikipedia.org/wiki/Money_launderinghttps://en.wikipedia.org/wiki/Underground_economyhttps://en.wikipedia.org/wiki/Privacyhttps://en.wikipedia.org/wiki/Subpoenahttps://en.wikipedia.org/wiki/Numbered_bank_account


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only permits a ban" to share information #ith others in cases of severe criminal acts) such as

identifying a terroristHs ban" account or ta& fraud) but not simple non-reporting of ta&able

income called ta& evasion in 4#it8erland/. (n $pril 201) rench ,inister BRrSme ahu8ac

#as forced to resign #hen the >eneva public prosecutor) acting 7uic"ly on a rench re7uest

related to ta& fraud) found evidence of undeclared 4#iss accounts.

;nder pressure from the >20and the !9*) the 4#iss government announced in ,arch

200D that it #ill abolish the distinction bet#een ta& fraudand ta& evasionin dealings #ith

foreign clients. The distinction remains valid for domestic clients. $ny ban" employee

violating a clientHs privacy could be punished 7uite severely by la#. $fter signing 12 ne#

double ta&ation treaties in accordance #ith the international standard set by the !9*)

4#it8erland #as removed from the grey list of non-compliant ta& jurisdictions.

(n !ctober 201) the 4#iss government stated that it intended to sign an international

agreement sponsored by the !9* that) if ratified by arliament) #ill align 4#iss ban"

practices #ith those of other countries and in effect end the special secrecy that clients of

4#iss ban"s had enjoyed in the past.

$fter the revelations of #histleblo#er radley ir"enfeld in 200E) ;4 #as caught red-

handed by the ;nited 4tates government offering ta& evasion strategies) sending undercover

ban"ers #ith encrypted computers to the ;nited 4tates. $fter it #as caught) ;4 paid a NE30

million penalty and handed over hundreds of client files to $merican authorities. (n 2010) the

4#iss and the ;nited 4tates governments negotiated an agreement allo#ing 4#iss ban" ;4

to transmit to the ;4 authorities information concerning C)C50 $merican clients of ;4

suspected of ta& evasion.

(n the aftermath of the ;4 and Bulius aer ban"ing cases) some #ealthy clients #hocontinue to use offshore accounts are turning to private ban"s in 4ingapore and ong Mong.

(n addition to the local 4ingapore or ong Mong ban"s) offices have been opened in those

localities by a number of 4#iss private ban"s. The move to 4ingapore and ong Mong is an

alternative to the ban"ing secrecy that 4#iss ban"s have come under attac" for. 4ingapore has

ban" secrecy provisions comparable to those in 4#it8erland. $lthough ong Mong does not

have the same ban" privacy la#s) it offers fle&ibility in the creation of opa7ue companies that

can serve as ta& conduits.
https://en.wikipedia.org/wiki/Tax_evasion_in_Switzerland#Tax-related_criminal_lawhttps://en.wikipedia.org/wiki/Tax_evasion_in_Switzerlandhttps://en.wikipedia.org/wiki/J%C3%A9r%C3%B4me_Cahuzachttps://en.wikipedia.org/wiki/G20https://en.wikipedia.org/wiki/OECDhttps://en.wikipedia.org/wiki/Tax_fraudhttps://en.wikipedia.org/wiki/Tax_evasionhttps://en.wikipedia.org/wiki/Whistleblowerhttps://en.wikipedia.org/wiki/Whistleblowerhttps://en.wikipedia.org/wiki/Bradley_Birkenfeldhttps://en.wikipedia.org/wiki/Tax_evasion_in_Switzerland#Tax-related_criminal_lawhttps://en.wikipedia.org/wiki/Tax_evasion_in_Switzerlandhttps://en.wikipedia.org/wiki/J%C3%A9r%C3%B4me_Cahuzachttps://en.wikipedia.org/wiki/G20https://en.wikipedia.org/wiki/OECDhttps://en.wikipedia.org/wiki/Tax_fraudhttps://en.wikipedia.org/wiki/Tax_evasionhttps://en.wikipedia.org/wiki/Whistleblowerhttps://en.wikipedia.org/wiki/Bradley_Birkenfeld


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,anyoffshore ban"s) located in ta& havenssuch as in the ayman (slandsand anama)also

have strict privacy la#s

4#iss ban" accounts arenHt just for millionaires) criminals or government officials trying to

hide ill-gotten #ealth) or celebrities protecting their assets from former spouses. TheyHre

available to anyone and lots of average people have 4#iss ban" accounts. eople #ho live in

countries #ith unstable governments and ban"s in particular often turn to 4#iss ban"s

because of their security and privacy.

ut letHs face it) most of us really just #ant to be able to say) L!h) (Hll #ire the money from

my 4#iss ban" account.L

O**S?ORE TA@ATION(n general) 4#it8erland does not ta& non-resident ban" accounts #ith the e&ception for 9;

nationals #ho either pay a #ithholding ta& or declare their earnings to their o#n ta&

authorities) but the scope of investment income actually ta&ed is very restrictive. e estimate

that around 30A of 9;-sourced money is not declared to local ta& authorities. $s for ;4

citi8ens) they are obliged to report

their assets held in 4#it8erland to the ;4 ta& authorities.

urrent international disputes have resulted in 4#it8erland having to adopt the !9*

standard on administrative assistance in ta& matters) #hich forms part of the !9*?s ,odel

Ta& onvention on (ncome and on apital. The standard relates to the e&change of

information) and adopting this threatens to increase ta&ation levied on 4#iss ban" accounts.

SWISS O**S?ORE PRI7ATE BANKIN-2 SIGE H ORI-INSThe 4#iss private-ban"ing industry has an enviable reputation around the #orld)

attracting huge amounts of #ealth into the country. The 4#iss %ational an"4%/ estimatesthat) as of the end of 2003) there #ere around 2.2trn invested #ith 4#iss ban"s in

4#it8erland by non-residents so-called @offshore? accounts although this figure is do#n on

the .1trn reported as at end-200E o#ing to the collapse in financial mar"ets during the

course of 2003. !ffshore accounts ma"e up around 60A of the total invested in 4#iss ban"s

according to 4% data. 4#iss economic and political stability in

an uncertain and volatile #orld has been a major attraction for #ealthy people) encouraging

them to place their money in 4#iss ban"s. This is obviously true for #ealthy individuals in

places li"e Fatin $merica and
https://en.wikipedia.org/wiki/Offshore_bankhttps://en.wikipedia.org/wiki/Offshore_bankhttps://en.wikipedia.org/wiki/Tax_havenhttps://en.wikipedia.org/wiki/Cayman_Islandshttps://en.wikipedia.org/wiki/Panamahttps://en.wikipedia.org/wiki/Panamahttps://en.wikipedia.org/wiki/Offshore_bankhttps://en.wikipedia.org/wiki/Tax_havenhttps://en.wikipedia.org/wiki/Cayman_Islandshttps://en.wikipedia.org/wiki/Panama


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some $sian and 9uropean countries today) but it has even been a valuable lurein the past to

attract money into 4#it8erland from clients in other countries of estern 9urope) notably

rance) >ermany) (taly) 4pain and even the ;M.

,ore contentious though has been the issue of 4#iss ban"ing secrecy and ta&ation. 4ince

1DC #hen the 4#iss ederal Fa# on an"s K 4avings an"s #as passed) it has been a

criminal offence for ban" employees to pass on information about ban" clients? accounts to

third parties) even government ta& inspectors from other countries .$s 4#it8erland does not

impose ta& on ban" accounts for non-residents) it is suspected by many that #ealthy

individuals in high-ta& countries #ishing to avoid ta& have put their money in 4#iss ban"s

safe in the "no#ledge that both the money transferred and investment income earned

on it #ill not be divulged to the local ta& authorities. 4ome mostly non-4#iss have

claimed that this 1DC 4#iss la# on ban"s #as a deliberate attempt to protect 4#iss ban"s

from foreign intrusions. reviously) as had been the case in most countries) ban"ing secrecy

#as a matter of best practice) but the 1DC ederal la# too" it to a higher level of seriousness.

ertainly) the 1D0s #ere

a period of considerable economic and political upheaval and uncertainty. (n particular)

9uropean ta&es #ere high after orld ar ( to pay for reconstruction and redemption of #ar

debts) and government agents from both rance and >ermany attempted to infiltrate 4#iss

ban"s to discover #hat as

sets their o#n citi8ens had placed in 4#iss ban"s. %otable incidents include the 1D2 @aris

$ffair? #hen the rench authorities ac7uired the names of 1)000 politically prominent clients

of asler andel ban" after t#o of its staff #as arrested in aris as they #ere trying to help

some rench citi8ens to avoid paying coupon ta&. This caused a scandal to erupt in rance.

$nother notorious case #as in 1D1 #hen a >erman) $rthur fau) tried to persuade ;4

employees to give him details about its >erman clients. e #as unsuccessful. (t should be

noted that this incident pre-dated the %a8is ta"ing po#er in >ermany in 1D) disproving

some of the rather high-minded) but deluded comments by some that 4#iss ban"ing secrecy

#as imposed to protect Be#ish money from the hands of the >ermans. $ particularly graphic

e&ample of this delusion can be seen from the follo#ing e&tract from redit 4uisse?s 1D66

Uuarterly +eport'

To a large degree) it is only a matter of academic interest #hether there #as intent in

4#it8erland?s 1DC ederal ban"ing legislation to enshrine ban"ing secrecy in la# for the


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purposes of gathering funds from foreign clients see"ing to evade ta& and thus boost the

4#iss ban"ing industry. The main issues are #hether the effects of the la# actually did result

in foreigners evading

ta& by putting their money into 4#iss ban"s) and) perhaps even more pertinently for public

policy) #hether foreign governments do believe this to be the case. (n this regard) the role of

4#it8erland in films and literature has only increased suspicions in revenue-hungry foreign

governments about the origins and motives of #ealthy foreigners placing their money

offshore in 4#it8erland.

4#it8erland has a much envied reputation as a private-ban"ing entre #hich has

$ttracted enormous amounts of #ealth from around the #orld 2.2trn of assets under

management $u,/ in 2003 according to statistics compiled by the 4#iss %ational an"

4%/. e estimate that around 50A of these

$u, come from 9uropean citi8ens. 4#it8erland has benefited from its image of

political and economic stability) ban"ing secrecy and lo# ta&. $lthough this may have

attracted money into the 4#iss ban"s) it has also attracted envious thoughts and no# action

from other countries. redit 4uisse and ;4 together manage around 50A of 4#iss private-

ban"ing assets) a further 15 ban"s manage another 0A) #ith another ban"s managing just

under 20A of the total. The industry is remar"ably fragmented outside the dominance of the

top 2

SO,RCES O* SWISS O**S?ORE MONE1

$s regards the origins by country of the non-resident money placed in 4#iss ban"s) 4%

statistics are pretty vague) but the 4% has disclosed the currency of the custody accounts see the chart belo#/. !n the basis that

all of the assets invested in euro came from 9urope and most of the @!ther? category #as in

pounds) #e believe that it is reasonable on this evidence to presume that around C0A of

4#iss ban"s? offshore

accounts have their origin in 9urope) #ith this amount e7ualing 1.2trn

Swi00 Ban) Acc&unt Ad/antae0

rivacy


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=our relationship #ith your 4#iss ban" can be compared to doctorVpatient confidentiality or

the private information you might share #ith an attorney. 4#iss la# forbids ban"ers to

disclose the e&istence of your account or any other information about it #ithout your consent

e&cept for certain circumstances) #hich #eHll discuss later/. here the similarity ends is

#hen that privacy is violated. hereas in the ;nited 4tates) if your doctor or attorney violates

your confidenceyoumust begin legal actionW in 4#it8erland) if a ban"er divulges information

about a ban" account #ithout permission) immediate prosecution is begun by the 4#iss

public attorney. an"ers face up to si& months in prison and a fine of up to 50)000 4#iss

francs. $nd) you have the option of suing the ban" for damages. %eedless to say) 4#iss ban"s

are very careful about protecting your privacy.

The only e&ceptions to the 4#iss ban"ing privacy rule are criminal activities such as d!u

t!a..ic)in) in0ide! t!adinor &!anied c!ime) #hich #eHll tal" more about later.

Fo# +is"

4o privacy is a big deal if you have moneyyou donHt #ant other people to "no# about) and

unless youHre a criminal itHs highly unli"ely anyone can ever find out about your account. or

e&ample) doctors #ho might be sued for malpractice might have money in a 4#iss account to

prevent them being totally #iped out in the event of la#suit. ;nethical) yes) but it happens.

+eally) anyone can have assets that they #ant to protect from attac". 4ometimes) though)

privacy isnHt the main reason people #ant a 4#iss ban" account. 4#it8erland has had an

e&tremely stable economy and infrastructure for many years and hasnHt been at #ar #ith

another country since 1505. 4#iss ban"ers are also highly trained in investing and "no# ho#

to gro# your money.

(ncreasing your #ealth means little if your money isnHt protected. 4o) ho# safe is your moneyin a 4#iss ban"X *epositor protection in 4#it8erland is governed by the Swi00 Ban)e!0

A00&ciati&n0 4$/ self-regulatory De=&0it&! P!&tecti&n A!eement and) since Buly 1)

200C) #as also codified into the 4#iss an"ing $ct #ith a fe# additional re7uirements that

significantly strengthened depositor protection in 4#it8erland I4ource' 4#issan"ing.orgJ.

The revised *epositorsH rotection $greement covers all deposits and is also applicable to

non-ban" securities dealers. rotecting depositors is vital in maintaining public confidence in

the 4#iss ban"ing system and) in order to strengthen this confidence) the 4$ had dra#n up

a self-regulatory *epositor rotection $greement #ith its member ban"s in 1D3C. This
http://money.howstuffworks.com/currency.htmhttp://www.swissbanking.org/en/medienmitteilung-050726-einlegerschutz.pdfhttp://money.howstuffworks.com/currency.htmhttp://www.swissbanking.org/en/medienmitteilung-050726-einlegerschutz.pdf


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agreement guarantees that) in the event of a ban" failure) depositors #ill rapidly receive their

legally privileged claims. $s an additional safety measure) 4#iss la# demands high capital

ade7uacy. 4#iss ban"s can therefore certainly be counted amongst the safest in the #orld.

(n fact) the 4#iss franc is considered one of the #orldHs premier currencies #ith virtually 8ero

inflation and has been historically bac"ed by at least C0 percent gold reserves. 4#iss ban"s

are also "no#n to have very sophisticated investment services and (nternet ban"ing.

+egulations

(n the ;nited 4tates) la# enforcement agencies) the judicial system) and even private citi8ens

can gain access to financial information of all sorts. (n 4#it8erland) ho#ever) neither a ban"Hs

officers) nor employees are allo#ed to reveal any account or account holder information to

anyone) including the 4#iss government.

The 4#iss ban"erHs re7uirement of client confidentiality is found in $rticle CE of the ederal

Fa# on an"s and 4avings an"s) #hich came into effect on %ovember 3) 1DC. The article

stipulates that Lanyone acting in hisVher capacity as member of a ban"ing body) as a ban"

employee) agent) li7uidator or auditor) as an observer of the 4#iss ederal an"ing

ommission 4/) or as a member of a body or an employee belonging to an accredited

auditing institution) is not permitted to divulge information entrusted to himVher or of #hich

heVshe has been apprised because of hisVher position.L

9&ceptions

(n order to sidestep this la#) there must be a substantial criminal allegation before a

governmental agency) especially a foreign one) can gain access to account information. Ta&

evasion) for e&ample) is considered a misdemeanor in 4#it8erland rather than a crime.

$ccording to the 4#iss an"ersH $ssociation eb site) ho#ever) there is also a duty for

ban"ers to provide information under the follo#ing circumstances'

ivil proceedings such as inheritance or divorce/

*ebt recovery and ban"ruptcies


24/37

riminal proceedings money laundering) association #ith a criminal organi8ation)

theft) ta& fraud) blac"mail) etc./

(nternational mutual legal assistance proceedings e&plained belo#/

(nternational mutual assistance in criminal matters

4#it8erland is re7uired to assist the authorities of foreign states in criminal matters as a result

of the 1D3 federal la# relating to Inte!nati&na> Mutua> A00i0tance in C!imina> Matte!0.

$ssets can be fro8en and handed over to the foreign authorities concerned. $ssistance in

criminal matters follo#s the principles of dual criminality) specialty and proportionality.

*ual criminality means that 4#iss courts donHt lift the re7uirement of ban"Vclient

confidentiality unless the act being investigated by the court is punishable under the la# in

both 4#it8erland and the country re7uesting the information. The specialty rule means that

information obtained through the arrangement can only be used for the criminal proceedings

for #hich the assistance is provided. The proportionality rule means the measures ta"en in

conducting the re7uest for assistance must be proportionate to the crime.

(nternational mutual assistance in administrative matters

;nder these proceedings) the Swi00 *ede!a> Ban)in C&mmi00i&n 4/ may

communicate information only to the supervisory authorities in foreign countries subject to

three statutory conditions'

The information given canHt be used for anything other than the direct supervision of

the ban"s or financial intermediaries #ho are officially authori8ed and canHt be passed

on to ta& authorities.

The re7uesting foreign authority must itself be bound by official or professional

confidentiality and be the intended recipient of the information.

The re7uesting authority may not give information to other authorities or to other

public supervisory bodies #ithout the prior agreement of the 4 or #ithout the

general authori8ation of an international treaty. (nformation canHt be given to criminal
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25/37

authorities in foreign countries if there are no arrangements regarding mutual legal

assistance in criminal matters bet#een the states involved.

Ta&ation

4#iss residents pay 5 percent ta& on the interest or dividends their 4#iss ban" accounts and

investments earn. This money is namelessly turned in to the 4#iss ta& authorities.

or nonresidents of 4#it8erland there are no ta&es levied on those earnings) unless'

4#iss ithholding Ta&

There is a 5 percent 4#iss #ithholding ta& on interest and dividends paid out by 4#isscompanies. 4o) if you invest in a 4#iss company such as %estlR or %ovartis) then 5 percent

of any dividends #ill be #ithheld as a ta& regardless of #here you live. The same is true if

you buy bonds issued by a 4#iss company. (f youHre a 4#iss ta&payer or if your country has

a double ta&ation agreement #ith 4#it8erland/ then you can claim the ta& bac". *ouble

ta&ation is #hen income is ta&ed both in your home country) as #ell as the country in #hich

the income is earned.

9; ithholding Ta&

!n Buly 1) 2005) the 9uropean ;nion ithholding Ta& came into effect to prevent residents

of 9; member countries from avoiding paying ta& on interest earned on money deposited in

foreign ban"s #ith very strong ban"ing secrecy la#s. The 9; goal had been for all countries

to disclose interest earnings to the home countries of their ban" clients so that that money

could be ta&ed. 4everal non-9; countries) 4#it8erland included) didnHt agree because it #ent

against their ban"ing privacyVsecrecy la#s. %o#) ban" clients #ho live in the 9uropean;nion pay a #ithholding ta& on the interest made by certain investments. This ta& started at

15 percent and is gradually increasing to 5 percent by 2011. %o e&change of information or

ta&es on capital or capital gains is levied.

(nheritance Ta&


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(f you #ant to pass on your account to your family and youHre not a 4#iss resident/ youHre in

luc" because there is no inheritance ta& in 4#it8erland for nonresidents. =our heirs are

responsible for declaring the holdings to their countryHs ta& authorities) ho#ever.

$ccording to 4#iss la#) nonresidents of 4#it8erland #ho #ould li"e to open a 4#iss ban"

account must be at least 13 years old. !ther than that) there arenHt a lot of restrictions. =our

account can be in almost any currency) although most choose the 4#iss franc) ;.4. dollar)

9uroor 4terling) and there is often no minimum balance re7uired to open an account. !nce

youHve started ma"ing deposits) ho#ever) there is a minimum balance you have to maintain

that varies from ban" to ban" and by type of account.

hoosing a ban" and an account

The 4#iss ban" you choose to deal #ith depends on #hat types of investments you #ant to

ma"e and the type of account you #ant have. !ne thing to "eep in mind is unless you donHt

care about the privacy aspect of a 4#iss ban" account) you shouldnHt choose a ban" that has a

branch in your country. an" branches have to follo# the la#s in the countries in #hich

theyHre located -- not #here the corporate ban" office is located. or e&ample) a 4#iss ban"

branch in the ;nited 4tates has no greater privacy capabilities than a regular ;.4. ban" does.

The type of account you open depends on the number of investments you #ant to have access

to and the amount of money you #ant to maintain in the account. The more e&tensive the

investment services and options are) the higher the re7uired balance for the account. =ou can

also have access to a safe deposit bo& at a 4#iss ban".

9arning interest

(f you maintain your account in 4#iss rancs you #ill earn a small amount of interest) but

#ill then have to pay the 4#iss #ithholding ta&. or this reason) most account holders that

donHt live in 4#it8erland have their 4#iss ban" account in some other currency such as ;.4.

*ollar) ritish ound or 9uro. hen you do this) your money can be put into a money mar"et

fund and #ill earn interest there.

!pening an account
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hile itHs usually better to open your account in person) there are many 4#iss ban"s that #ill

allo# you to open an account by mail or fa&. There are also many firms that e&ist to assist

people in setting up offshore accounts.

ecause 4#iss anti-money-laundering la# re7uires you prove #here your money is coming

from) many certified documents are re7uired in order to open an account. These include

authenticated copies of your passportW documents e&plaining #hat you do for a living such as

ta& returns) company documents) professional licenses) etc.W proof of #here the money you

are depositing is coming from such as a contract from the sale of a business or houseW and all

of the typical personal information about yourself such as your birth date) a utility bill to

prove your residence) all contact information) and) of course) your name. TheyHll also #ant to

"no# #hat you #ant to do #ith the money once you have the account.

(f youHre opening your account by mail) youHll need to have the ban" applications sent to you

to complete and sign along #ith the rest of the documents mentioned above.

!ne difference bet#een opening an account in person and doing it by mail is the re7uirement

of an a=&0ti>>eon the authenticated copy of your passport and no) a driverHs license #onHt be

accepted as proof of your identity/.

$n apostille is a seal used to certify that an official document is an authentic copy. (n most

countries) you can get it from a notary public but sometimes notaries arenHt familiar #ith

them. (f this happens you must either find another notary #ho is) or find out #hat other

authority in your country can issue apostilles. $ny country that participated in the ague

onvention designates an authority that can issue apostilles e.g.) in the ;nited 4tates) the

office of the stateHs secretary is authori8ed to do this/. The most important thing is to al#ays

ma"e sure the seal says $!4T(FF94.

!pening a numbered account

%umbered accounts are usually not as easy to open. They typically re7uire that you

physically go to the ban" in 4#it8erland. They also typically re7uire an initial deposit of at

least N100)000 and cost about N00 per year or more to maintain. $nd remember) theyHre still

not anonymous since there has to be a connection at some level bet#een #ho you actually are

and your account.


28/37

,inimum depositsVbalances and fees

,inimum balances vary greatly by type of account i.e.) a fe# thousand dollars to one million

dollars or more/. $nd) ban"s charge differing fees based on the types of transactions and the

account type you have. or e&ample) on a basic account) international ban" transfers

outgoing/ might cost N or NC each. They may also charge N5 to N10 #hen you deposit

international chec"s to your account. $nnual account maintenance costs are charged based on

the number of entries in your account statement and are sometimes in the neighborhood of

0.5 4#iss rancs i.e.) N0.C1/ per entry.

$ccessing =our ,oney

C!edit ca!d2,ost 4#iss ban"s #ill issue a credit card#ith your account that you

can use to ma"e purchases) as #ell as #ithdra#als at $T,saround the #orld. ash

advances) ho#ever) #ill charge a fee usually 2.5 percent/. ;se of a credit card can

also be traced bac" to your 4#iss ban" revealing the fact that you have the account.

These credit cards are issued differently from typical credit cards) ho#ever. +ather

than pulling a credit report and actually issuing true credit) 4#iss ban"s re7uire that

you ma"e a security deposit that is 1 to 2 times your monthly credit limit depending

on the type of account you have. The security deposit itself is held in a separate

account and invested.

Ca0h withd!awa>02(f youHre in 4#it8erland you can #al" into your ban" and ma"e a

direct cash #ithdra#al) leaving no record of the access.

T!a/e>e!0 chec)0' uying travelersH chec"s is one #ay of using the money from your

4#iss account and maintaining your secrecy. TheyHre easy to use and #idely accepted)but you #ill have to pay a 1 percent commission on the amount of the chec".
http://money.howstuffworks.com/personal-finance/debt-management/credit-card.htmhttp://money.howstuffworks.com/personal-finance/banking/atm.htmhttp://money.howstuffworks.com/personal-finance/banking/atm.htmhttp://money.howstuffworks.com/personal-finance/debt-management/credit-card.htmhttp://money.howstuffworks.com/personal-finance/banking/atm.htm


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T!a/e>e!0 Chec) .!&m Ame!ican E=!e00

ourtesy of


30/37

(mposition of Ta& $ct) 2015 @blac" money la#? for short/) contrary to the popular notion) is

not a typical amnesty scheme but a riot act -- comply or face dire conse7uences.

(t offers a limited compliance #indo# from 1 Buly 2015 to 0 4eptember 2015 #ithin #hich

one can come clean and pay a ta& of 0 percent on foreign #ealth secreted a#ay together

#ith a penalty of another 0 percent. ritics say 60 percent is too high an impost even for

those possessed by contrition but then they #ould better comply because other#ise the noose

could tighten around their nec"s.

The blac" money la# says should the assessing officer unearth undisclosed foreign income

and asset post this limited amnesty) the conse7uence #ould be 0 percent ta& plus penalty of

D0 percent #ith the depressing prospect of cooling heels behind bars for ten years.

The la# targets residents and therefore there should be no difficulty in nabbing them once the

officials have built a #atertight case. The ire of the la# falls mainly on those #ho #hile

smugly residing in (ndia salt a#ay their ill-gotten #ealth through subterranean channels a"a

ha#ala route to salubrious climes li"e 4#it8erland) ,auritius and *ubai.

The (ncome Ta& $ct 1D61 sets the stage for the assessing officer under the blac" money la#

to step in and every resident must disclose his foreign assets in his normal income ta& return.

The ones not declared is #hat the officer under the blac" money la# is going to pounce on. $

good tango indeed.

That the redoubtable 4#iss ban"s of all are as"ing (ndian residents to ta"e full advantage of

the compliance #indo# is a definitive stra# in the #ind that the limited amnesty is going to

be a success and that reprisal is going to be s#ift and fast against recalcitrant blac" money

generators in the years to come. hat has made the 4#iss and other 9uropean ban"s to relent

for the first time is the possibility of their officials being put behind bars in (ndia for seven

years in addition to fine for abetting the crime by (ndian residents. This is no mean victory for

the ,odi government. $ permanent anti-blac" money la# rather than periodical 7uasi-

permanent amnesty la#s #as #hat the doctor had ordered. ,odi and Baitley just delivered

that.


31/37


32/37

(ndia has moved do#n to 61st place in terms of foreignersH money in 4#iss ban"s and it no#

accounts for a meager 0.12 percent of the total global #ealth #orth N1.6 trillion in

4#it8erlandHs ban"ing system.

hile the ;M and the ;4 have retained their top t#o positions #ith the largest shares of the

foreign clientsH money #ith 4#iss ban"s) a"istan has inched up to Erd place.

(nterestingly) just t#o big ban"s -- ;4 and redit 4uisse -- account for nearly t#o-third of

the total money "ept by foreigners in 4#iss ban"s) #hile their share in case of (ndians is even

higher at about 32 percent.

$s per the latest data released by 4#it8erlandHs central ban"ing authority 4% 4#iss%ational an"/) (ndiansH money in 4#iss ban"s declined by over 10 percent to about 1.3billion 4#iss francs N1.D3 billion or +s 12)615 crore/ in 201C.

This accounts for just 0.12 percent of the total funds "ept in the 4#iss ban"s by people from

across the #orld.

This is the second lo#est level of (ndian money in 4#iss ban"s -- after an increase of over C0

percent in 201 -- and the latest data comes amid an enhanced clampdo#n against the famed

secrecy #all of 4#it8erlandHs ban"ing system.

The funds) described by 4% as HliabilitiesH of 4#iss ban"s or Lamounts due to the customers

of ban"s in


33/37

4#it8erlandL are official 4#iss figures and do not indicate to the 7uantum of the much-

debated alleged blac" money held by (ndians in the safe havens of 4#it8erland.

esides) 4%Hs official figures do not include the money that (ndians or others might have in

4#iss ban"s in the names of entities from different countries.

$n analysis of the latest 4% data also sho#ed that the big ban"s accounted for 1.C3 billion

4#iss francs of (ndiansH money) up from 1.6 billion 4#iss francs a year ago.

$t the end of 201C) there #ere 2E5 ban"s in 4#it8erland) but only t#o -- ;4 and redit

4uisse -- #ere classified as Hbig ban"sH by Ourich-based 4% at that time. There are also many

foreign-controlled ban"s operating in the country.

The t#o big ban"sH share also rose in the case of the ;M) the ;4 and a number of other

countries.

Their share almost doubled in case of a"istan to CE2 million 4#iss francs) but still

accounted for just 6 percent of the total amount of 1. bill billion 4#iss franc held in all

4#iss ban"s by their clients from that country up from just about one billion 4#iss franc a

year ago/.

This pushed a"istan one place higher to Erd place on the overall list of the countries in

terms of foreignersH money in 4#iss ban"s. (ndia has come do#n three places.

(n the top-ten) the ;M and the ;4 are follo#ed by est (ndies) >uernsey) >ermany)

ahamas) Fu&embourg) rance) Bersey and ong Mong.

The ;M alone accounts for 22 percent of total global funds in 4#iss ban"s. Bust four top

nations together account for over half of all foreignersH #ealth in 4#iss ban"s) #hich rose to

1.CE trillion 4#iss franc about +s 102 la"h crore or N1.6 trillion/ in 201C.

There are only 1D countries #ith share of over 1 percent each and they together command

more than 30 percent of funds. The remaining 20 percent is divided among close to 200 other

countries.

hina up at 26th place #ith 3.2 billion 4#iss franc/ has a share of 0.55 percent) #hilea"istan has 0.0D percent.


34/37

$ number of perceived ta&-havens ran" higher than (ndia in terms of money in 4#iss ban"s)

#hile others placed above (ndia include 4ingapore) (taly) Bapan) $ustralia) +ussia) the ;$9)

4audi $rabia) the %etherlands) elgium) 4pain) (srael and yprus.

,ore than half of the total funds comes from the developed countries 35C billion 4#iss

franc/) #hile the offshore centres account for C15 billion 4#iss franc and all the developing

countries put together 20E billion 4#iss franc.

9urope accounts for about D00 billion 4#iss franc) #hile $sia acificHs share is close to 500

billion 4#iss franc.

$s per the latest data) the total (ndian money held in 4#iss ban"s at the end of 201C included

1)EE6 million 4#iss franc or +s 12)50 crore held directly by (ndian individuals and entities

do#n from 1)D52 million a year ago/) and another 3 million 4#iss franc do#n from EE.

million 4#iss francs at 201-end/ through HfiduciariesH or #ealth managers.

o#ever) Lamounts due to customersH savings and deposit accountsL #as only 52

million do#n from 6 million a year ago/) #hile over 100 million #as due

through other ban"s and the remaining amount of #ell over one billion 4#iss francs have

been classified as Lother amounts due to the customersL from (ndia.

$s per the latest data) the amount held by (ndians through fiduciaries has reached a record

lo# level) #hile it used to be in billions till about seven years ago.

The latest data from Ourich-based 4% comes at a time #hen 4#it8erland has begun sharing

foreign client details on submission of evidence of #rongdoing provided by (ndia and some

other countries.

(t has been facing gro#ing pressure from (ndia and many other countries to share foreign

client details) although its o#n la#ma"ers #ere resisting such measures for a long time.

$ccording to the 4% data) funds held by the ;4 entities in 4#iss ban"s rose for the second

consecutive year and stood at 2CC billion 4#iss franc at the end of 201C) despite a major

crac"do#n by the $merican authorities against the 4#iss ban"s.


35/37

The countries ran"ed belo# (ndia include Uatar) !man) (ran) ,auritius) %or#ay) *enmar")

inland) %epal) angladesh)


36/37

belo#) but #hether the blac" money holders list is true) half-true) not true is for you to judge

amount in crores/.

1- $sho" >ehlot 220000/

2- +ahul >andhi 153000/

- arshad ,ehta 15300/

C- 4harad a#ar 32000/

5- $sho" havan E6333/

6- arish +a#at E5000/

E- 4onia >andhi 56300/

3- ,uthuvel Marunanidhi 5000/

D- *igvijay 4ingh 23D00/

10- Mapil 4ibal 23000/

11- +ajeev >andhi 1D300/

12- alaniappan hidambaram 150C0/

1- Bayaram Baylalitha 15000/

1C- Malanithi ,aran 15000/

15- * Mumars#amy 1C500/

16- $hmed atel D000/

1E- B , 4cindia D000/

13- Metan are"h 3200/

1D- $ndimuthu +aja E300/


37/37

20- 4uresh Malmadi 5D00/

The suspense over the detailed list continues to build as time passes by. (t #ill be interesting

to see if the central government hands over the list of the account holders to the 4upreme

ourt on !ctober 2D. ;nion inance ,inister has said that the government has already

shared the list #ith the 4(T on Bune 2E and there is no 7uestion of not sharing it #ith the

4upreme ourt. (f the entire list is out in public domain) it #ill be a historic day for both the

government and the people of (ndia. hile the persons named on the list #ill be hit #ith an

embarrassing bomb.

Web>i&!a=hy

###.businessinsider.in

###.indiane&press.com

###.slideshare.com

###.#i"ipedia.com

###.timesofindia.com

###.indiangovtla#.com
http://www.businessinsider.in/http://www.indianexpress.com/http://www.slideshare.com/http://www.wikipedia.com/http://www.timesofindia.com/http://www.indiangovtlaw.com/http://www.businessinsider.in/http://www.indianexpress.com/http://www.slideshare.com/http://www.wikipedia.com/http://www.timesofindia.com/http://www.indiangovtlaw.com/

Documents

Swiss Bank Project (1)