07 Apr 2009, David Benyon, Operational Risk & Regulation
BERNE - Swiss authorities say the volume of suspicious financial activity has increased to record levels. Switzerland denies being a tax haven, but is renowned for a lack of banking transparency.
Switzerland's Money Laundering Reporting Office (MLRO) received a record number of suspicious activity reports related to money laundering from the country's banking sector in 2008, with 851 reports last year - up from 795 the year before.
The Swiss Federal Department of Justice and Police (FDJP) said the combined value of assets covered by the reports had also reached a record high, doubling from 2007 levels to hit $1.65 billion in 2008.
It said two-thirds of all reports were from the banking sector and that frauds represented the majority of cases under suspicion. Investment fraud accounted for 38.5% and 9.5% was linked to bribery. It added that most offences were alleged to have taken place outside Switzerland and the money deposited in Swiss bank accounts.
Switzerland was named by the Organisation for Economic Co-operation and Development (OECD) as one of its "grey list" of 38 territories yet to comply with its banking secrecy code. The list also included EU members Austria, Belgium and Luxembourg, along with Switzerland and Liechtenstein.
Switzerland has already pledged to reach OECD compliance and the grey list elicited an angry response from Swiss authorities, who rejected the notion that the country is a tax haven.
"Switzerland is not a tax haven. It always meets its obligations and is always ready to engage in dialogue. [Swiss] president Hans-Rudolf Merz regrets this procedure," said a statement from the Swiss finance ministry.
Swiss authorities will meet their counterparts from the US Treasury in Berne on April 28 to amend a bilateral income tax treaty between the two countries and improve transparency. Switzerland is co-operating with the US in investigating the private wealth management business of Swiss bank UBS and its US customers for tax evasion.
The OECD has previously placed the Philippines, Malaysia, Costa Rica and Uruguay on its "black list" of jurisdictions refusing to comply with its guidelines. It subsequently removed all four countries from the list in the face of angry political rebuttals and pledges of compliance.