Transparency praises Swiss action on money laundering

Philippe Levy (left) and Niklaus Huber said Switzerland has made progress fighting money laundering Keystone

Transparency International, founded to fight global corruption, has praised Switzerland's efforts to combat money laundering, in its first report on corruption.

But the president of the Swiss chapter of Transparency International warns that financial institutions around the world have failed to shed light on illegal transactions of the type which financed the September 11 terrorist attacks in the United States.

The new report offers a unique insight into the extent of corruption – from petty pilfering to billion-dollar embezzlements – on all continents.

It also examines the extent to which nations are taking measures to stop financial crime.

“The most encouraging signs of change occurred in Switzerland,” the report says, “where the heads of the big Swiss banks have come under pressure to open their books if accounts are suspected of being connected to serious crime.”

Niklaus Huber, the former head of Switzerland’s Money Laundering Control Authority, said the report reflected progress made by the Swiss authorities.

“I think it’s a fair report,” Huber told swissinfo. “I would say it is our European neighbours and also the United States who should catch up with us,” he added.

“We have a fundamental interest in keeping our financial market clean and I think Switzerland should continue to do and give its best.”

Not just praise

But Philippe Lévy, president of Transparency International’s Swiss chapter, admitted the report fell short of a ringing endorsement of Switzerland’s battle against financial corruption.

“Compared with other large bank centres such as those in the UK, USA, France and Germany, we have made more progress than our competitors, but there is still a long way to go,” Lévy said.

The report also refers to settlements made by the largest Swiss banks, UBS and Credit Suisse, to heirs of Holocaust victims who deposited money in Switzerland.

“The impetus for greater transparency came from the belief that large sums of money, deposited in accounts by Holocaust victims, were being withheld from their heirs by Swiss banks hiding behind secrecy laws.”

Additionally, the report cites Swiss success in tracking down accounts belonging to the family of former Nigerian president, Sani Abacha, but notes that further work needs to be done to combat financial fraud inside Switzerland.

“Corrupt money…needs to be laundered and it seeks out weak points in networks of financial control,” the report says.

Two financial centres singled out in the report as examples of such weak points are Zurich and London.

Criminal activity

“The problems which we face cannot be resolved with money-laundering counter measures alone. This is a political and social problem of a global dimension. Before, money laundering was seen as a crime carried out by criminal organisations, but I think that people have now realised there is something worse than illicit profits, and that is terrorism,” Huber said.

Lévy agrees with Huber that the need to counter money laundering and terrorism has become more acute since the September 11 attacks in the United States.

“Criminals use the international banking institutions to transfer money which then serves to execute their crimes,” Lévy said

“This is not a new phenomenon, but we are to blame for not being prepared and now additional efforts must be made,” he added.

Intelligence failure

The attacks on the World Trade Center and the Pentagon, argues Lévy, are proof that the “secret services and all the institutions which should throw light on illegal or criminal transactions have failed.”

“It is absolutely crucial that we get these phenomena under control, otherwise we may all become the victims of such acts,” he added.

International efforts to combat terrorism and global financial crime may be the focus of the report, but Transparency International stresses that corruption does not just involve the wealthy or the powerful, but also has a direct impact on the poor and destitute.

“Usually we talk about corruption in terms of the Abacha millions, but there is also petty corruption which is of course particularly hard for the poor,” Lévy told swissinfo.

“The real victims of corruption are as usual the poor people, such as the mother who needs some drugs for her sick child and doesn’t get them because she can’t pay a bribe to the doctor.”

by Ramsey Zarifeh