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Economic crime costs Switzerland dearly

Pirated software being destroyed in Zurich Keystone

The latest crime report from the Federal Police Office shows that economic crime costs the Swiss economy between SFr3 billion and SFr5.4 billion ($4 billion) each year.

This content was published on August 4, 2003 - 13:19

And a top police official says Switzerland lacks the personnel to tackle such crime effectively.

Christian Weber, the head of canton Zurich's prosecuting office, said that to combat such crime effectively, his office would "need three times as many staff" as now.

The report says that the methods used to carry out illegal transactions are becoming increasingly sophisticated, thwarting investigations.

In addition, economic crime networks are often set up to execute a single illegal transaction, before being dissolved once the money has changed hands.

According to the report, many economic crimes also fall into a legal grey area in Switzerland, because there is no specific reference to them in the penal code.

“The acts are situated in an opaque zone, between crime and unethical practice,” the report says.

The German-language business publication, “Handelszeitung”, has also called for more experts in Switzerland to tackle economic crime and pursue cases.

High costs

The report estimates that illegal work practices deprive the state of around SFr1.75 billion per year through lost benefits and taxes.

More traditional crimes, such as fraud, also cause considerable financial damage, running to around SFr1.16 billion. But the report says the real figure could be more than twice that.

Another costly economic crime is piracy. Experts estimate that the distribution of illegal copies of pirated films and counterfeit goods was believed to be worth around SFr175 million in 2001.

But the report points out that despite the considerable cost of economic crime, it poses no real threat to interior security or to the economy.

One of the most serious consequences is the damage to a firm's reputation once an offence is uncovered, the report warns.

A recent survey conducted by accounting giant PriceWaterhouseCoopers found that economic crime could also lead to a drop in staff morale.

It said the damage to a company’s reputation was also likely to last a great deal longer than the effects of any financial penalties.

swissinfo with agencies

Key facts

Economic crime is estimated to affect 24 per cent of Swiss firms, according to a recent global survey by Pricewaterhouse Coopers.
Globally, 37 per cent of businesses are touched by economic crime.
Black market work is one of the most costly economic crimes in Switzerland, amounting to around SFr1.75 billion per year.
The most significant non-material damage caused by economic crime is loss of confidence in business, including a drop in staff morale.

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