Switzerland's tiny neighbour Liechtenstein has been blacklisted by the international body responsible for combating money laundering. The principality was one of 15 nations deemed to be uncooperative in efforts to stamp out the crime.
The Financial Action Task Force (FATF) named 15 countries, which it said needed to implement international standards to combat money laundering. Switzerland was not among them.
The FATF report shied away from openly criticising the nations on the blacklist, although the Organisation for Economic Cooperation and Development (OECD) has in the past accused many of them of obstructing international efforts to fight money laundering.
The FATF confined itself to outlining the areas in which progress was needed, and recommended what action to take.
It said it hoped "the publication of the report, together with the continuing dialogue, will encourage all jurisdictions concerned to take appropriate and urgent steps to improve their anti-money laundering regime...".
In drawing up the blacklist, the FATF assessed 29 countries, including Switzerland, to see whether they satisfied a list of 25 criteria deemed necessary to combat money laundering. They concluded that Switzerland had made sufficient progress.
Mark Pieth, a Swiss expert on money laundering at the Organisation for Economic Cooperation and Development (OECD), expected that Liechtenstein would be targeted.
He says the tiny principality has continued to hold on to its "excessive banking secrecy" in face of international pressure, and that it still has a "very hesitant attitude in co-operating in legal and administrative matters".
Pieth believes the blacklist will encourage Liechtenstein to be more cooperative. But he warns that, if it were to persist in being obstructive, "there are some very tough sanctions that could be applied and these would lead to a kind of marginalisation of Liechtenstein".
Large financial centres could block the re-transfer of funds, which would deter people from investing in Liechtenstein because of fears that they may have difficulty moving their money in and out of the country.
The other 14 countries which could face similar penalties include: the Bahamas, the Cayman Islands, the Cook Islands, Dominca, Israel, Lebanon, the Marshall Islands, Nauru, Niue, Panama, the Philippines, Russia, St Kitts and Nevis, and St Vincent and the Grenadines.
At the moment, these countries are taking most of the heat for banking secrecy. But the issue is almost certain to return to haunt Switzerland.
Earlier this week, a European Union agreement on capital gains tax hinted that Switzerland would have to scrap its own banking secrecy laws, if the country is to join the EU.
But observers believe the pressure will start before talks on Swiss membership begin. Mark Pieth says that: "if the wider world is ready to take action against Liechtenstein, which has a customs and currency union with the Switzerland, the Swiss have to consider the possibility that they too may face similar pressures."
Rudolf Strahm, finance spokesman for the Swiss Social Democratic Party agrees: "In the long run, the EU will not tolerate a tax haven on this continent. I think sooner or later, banking secrecy will be terminated."
But banking secrecy has powerful backers in Switzerland, and not only among self-interested banks. The government believes there is strong public support for it - so strong, in fact, that the finance minister, Kaspar Villiger, thinks that a referendum calling for it to be scraped would fail. "I don't see any chance that the Swiss people would abandon banking secrecy, and the issue would have to go to a vote. It's an element of our culture."
swissinfo with agencies