To,
His
Excellency President of Federal Republic of Switzerland,
Through,
Swiss Ambassador to India: generalsekretaer@eda.admin.ch,
dvsite@eda.admin.ch, Vertretung@ndh.rep.admin.ch,
Ruchita.Jindal@ndh.rep.admin.ch
Thanking you for prompt response with references to my Letter and Email both dated 29th (date of letter
changed by pen as 29th) April 2005 through Ms. Ruchita Jindal on behalf of the Swiss Ambassador to India accompanying
a the official policy in the form of the transcript of a speech delivered by Ambassador Jacques de Watteville, Head of the Economic and Financial Affairs
Division of the Swiss Federal Department of Foreign Affairs, at the Swiss Press Club, Geneva, on 23rd January 2002. From the
said transcript Switzerland equally shown its concerns, with certain reservations, on the issues raised by me in my aforesaid
letter. The aforesaid letter and complete transcript in proper order are posted at:
https://milapchoraria.tripod.com/swiss
In view of the aforesaid transcript, in principle Swiss Government is against illegal money
deposits, in Swiss Banks, by the Money launders, Political or other corrupt practitioners and Tax Evaders and already providing
co-operation in judicial matters. At the same time Switzerland claimed new financial centers in different countries providing
protective laws for deposit of illegal money. In view of such important admission from the Switzerland, though with certain
reservations, before review of my decision to sit on un-definite fast at out side Swiss embassy, I will be happy if the Government
of Switzerland provide following details which are in accordance its commitments in principle through aforesaid transcript:-
1. Volume of the
Total Money deposited from India in Switzerland Banks (As per rumors prevailing in India CVC estimated such amount about Sixteen
Lakhs of Crores of Rupees equal to $US 400 Billion Dollars)?
2. After applying
the principle of "know-your-customer", whether Switzerland Banks estimated the volume of amount not relates to "know-your-customer"-principles?,
if so kindly specify volume such amounts from India.
3. Who will be beneficiary country in respect
of the money deposited in violation of the "know-your-customer"-principles? Whether such money is transferred to the country
of origin from such deposits arrived or frozen by the Switzerland Government and deposited in its consolidated fund?
4. Switzerland Government is already providing
Judicial co-operation, but in accordance with its commitment with International Treaties, concept of globlisation and newly
developed and adopted by various countries the “Right to Information”-principle, why not sharing information with
the Government of countries wherefrom money is coming in the Switzerland Banks?
I hope that answer of these questions by the Switzerland will be within the admitted principles
by the Switzerland.
With Best Regards,
(MILAP CHORARIA)
Convenor
: Movement for Accountability to Public (MAP) :
http://groups.yahoo.com/group/MAP_INDIA
Columnist : For Several DAILY Newspapers in India
Author: A MODEL OF NEW CONSTITUTION FOR INDIA
B-5/52, Sector-7, Rohini,
New
Delhi-110 085 Email:
Milap_choraria@yahoo.com
Following important extracts obtained from the aforesaid transcript are forwarded by the Switzerland
Government:-
“Switzerland's banking secrecy does not protect terrorists, nor does it protect criminal
organizations or criminal activities of any nature whatsoever. In such cases, Switzerland does not hesitate to offer international
co-operation in judicial matters and to freeze incriminated assets.”
“Beyond the adoption of international agreements and appropriate legislation, it is
of course also essential that the political will exists to implement them thoroughly - and this is certainly the case in Switzerland.”
“Switzerland has also launched initiatives aimed at bringing about a more coherent response
at the international level in cases of this sort. For example, it proposed specific precautionary measures to the Committee
of Basle (consolidated supervision of banks) and the FATF concerning the opening of accounts for "politically exposed figures".”
“Switzerland contributed a number of specific proposals aimed at reinforcing international
co-operation, improving the application of sanctions and ensuring better control of their implementation.”
“Switzerland outlawed the laundering of money of unlawful origin in Article 305 of the
Swiss Penal Code in 1990, and passed a separate law on money laundering that came into effect in April 1998. The latter introduced
an obligation that is applicable throughout the banking sector and extends to all financial intermediaries, to report any
suspicions of unlawful transactions. These provisions are rounded off by the directives of the Federal Banking Commission.
Furthermore, the revision of the Federal Law on International Mutual Assistance in Criminal Matters, which came into effect
in February 1997, considerably simplified the process of mutual legal assistance. It greatly shortens the duration of implementation
procedures by limiting the possibilities of appeal and narrowing the circle of persons entitled to appeal. An evaluation of
Switzerland carried out by the FATF in 1998 confirmed that our country's legislation aimed at combating the laundering of
money of criminal origin is among the most advanced in the world.”
“Switzerland is in favour of tough multilateral efforts aimed at preventing the unlawful
use of the world's financial centres by criminal organisations. We are offering our fullest co-operation at the international
level. We welcomed the adoption of UN Security Council Resolution 1373 on the fight against terrorism and took steps to secure
its swift implementation. Already in June 2001, we signed the United Nations Convention for the Suppression of Terrorist Financing,
which we will ratify as quickly as possible.”
“It is also crucial that financial intermediaries in both the banking and non-banking
sectors thoroughly verify their client relationships in order to better identify suspicious circumstances and elements. In
this connection, strict observation of the "know-your-customer"-principles is of the utmost importance. Swiss legislation
on fighting money laundering stipulates that all financial intermediaries - not just banks and certain other institutions
- who suspect that a given client may be involved in money laundering are obliged to notify the relevant authorities and immediately
block the assets of the client concerned.”
“Switzerland will not tolerate the use of its financial system by terrorists for committing
criminal acts; we introduced the necessary measures many years ago to prevent it from being used to finance terrorist activities.
In accordance with our legislation governing international judicial co-operation and the international treaties we have signed,
Switzerland co-operates fully in the investigation of international criminal activities. Our banks are obliged by law to provide
information of any nature relating to criminal investigations if requested to do so by the judiciary authorities.”
“Targeted economic sanctions ("smart sanctions")”
“In order to develop the substantial work that was already accomplished in Interlaken
(http://www.smartsanctions.ch) and put the new concept into practice, the Swiss government in co-operation with the Watson
Institute for International Studies (Brown University, USA) conducted more in-depth studies. These gave rise to a manual outlining
the concept and detailing how targeted financial sanctions
could be implemented. The document was submitted to the UN Security Council in New York last
October.”
“We are the first country to have extended the scope of application of this assessment
to include its legislation against money laundering, and this clearly underscores our active commitment to the fight against
unlawful use of the global financial system.”
“Switzerland has submitted various specific proposals of its own, and is supporting
others, aimed at improving the practical application of the "know your customer" rule. In particular, we feel that the procedures
for identifying bank clients should be extended to include financial beneficiaries as well as clients who are the bank's contact
person. Throughout the world, banks should not be content to simply accept official documents such as extracts from commercial
registers concerning legal entities or fiduciary companies, but instead need to obtain sound information concerning those
persons who effectively control the assets concerned. This particularly applies to bank clients acting through professional
intermediaries (lawyers or fiduciary representatives), or who use legal entities, front companies or trusts. Furthermore,
it is essential that these regulations apply to both the banking and non-banking sectors - all the more so under the present
circumstances in which international terrorist organisations have sophisticated financial networks at their disposal that
include fiduciary companies, front firms and charity foundations.”
“Corruption: Another aspect of financial crime that has gained in importance in the
international arena over the past few years is corruption. This can largely be explained through an awareness of the severity
of the problem, its negative impacts on the progress of numerous developing countries or nations in transition, and the necessity
to bring those efforts to completion that have been initiated by the international community to combat organised crime and
money laundering.”
“Furthermore, it has to be noted that severe cases of corruption are frequently associated
with the problem of illicit funds deposited by leading political figures (e.g. heads of state). Switzerland is actively involved
in the fight against corruption, both at home and in the international arena. We played a major role in the formulation of
the 1999 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The workgroup
was chaired by Professor Mark Pieth (University of Basle), while the negotiations group was presided over by a Swiss diplomat,
Ambassador Marino Baldi. Switzerland has already ratified this convention and accordingly amended its Penal Code, thereby
outlawing bribery of foreign public officials in international business transactions. On 26 February 2001, Switzerland also
signed the Council of Europe Criminal Law Convention on Corruption which includes clauses governing the responsibility of
legal entities. Finally, Switzerland is pursuing its commitment within the framework of a future United Nations convention
to combat corruption, work on which was initiated in Vienna on 21 January.”
“It soon became apparent that major financial centers and banks in a large number of
countries are exposed to this problem. These two seminars presented an opportunity to exchange findings with respect to the
prevention of such activities, the tracing and freezing of accounts and the return of stolen assets, as well as to discuss
questions relating to immunity on the part of heads of state. They also supported the ongoing search for concerted solutions
at the international level, as well as the activities within international fora such as the Committee of Basle and the FATF.”
“Tax offences: Some of our arguments have meanwhile entered the international debate.
The OECD report on improving access to bank information for tax purposes, which was approved in March 2000 following intense
negotiations, explicitly acknowledges the legitimacy of the principle of confidentiality and proposes a number of measures
aimed at combating fiscal crime more effectively. Switzerland approved this report. We are prepared to provide administrative
assistance in cases of tax fraud by means of amendments to bilateral agreements on double taxation. Several bilateral negotiations
are presently in course to achieve this goal.”
“However, Switzerland does not intend to participate in a system that calls for an automatic
exchange of information.”
“Switzerland has absolutely no interest whatsoever in allowing its territory to be used
for such activities, and we have been taking measures over the past few years that have practically put an end to trafficking
across our borders. We are willing to find solutions, together with the EU and its member states, in order to even more effectively
combat fraud involving the movement of goods. In order to achieve this goal, we have proposed to provide the EU with increased
administrative and judicial co-operation in cases involving subsidy fraud, organised smuggling and, potentially, other organised
illegal activities involving indirect taxes or subsidies and which are associated with international movements of goods. Both
the EU and Switzerland are of the opinion that direct taxation should not be included in negotiations concerning customs fraud.”
“The Swiss Financial center: The developments on the international scene that are aimed
at promoting a broader exchange of information cannot be separated from the fact that any easing of the observation of confidentiality
in Switzerland would certainly be welcomed by various rival financial centres, which would be only too happy to welcome certain
assets currently deposited in our country. In this context, in which significant economic interests are involved and arguments
of an ethical nature raised, it should be pointed out that a number of countries of the OECD have offshore financial centres
within their zones of influence, and which have been gaining rapidly in importance over the past few years. Other countries
benefit from legislation that grants an even higher degree of confidentiality than Swiss legislation.”
“Furthermore it should also be emphasised that Switzerland applies the principle of
"know your customer" very rigorously, and contrary to the claims made in countless crime novels and thrillers, there are no
"anonymous accounts" in Switzerland. And, unlike Switzerland, some countries of the OECD do not appear to efficiently co-operate
in the area of international judicial assistance. It is essential that these principles are duly applied at the international
level in a coherent manner.”
“With all due respect to Mr. Arnaud Montebourg, Switzerland is certainly not an ideal
location for washing money of criminal origin. Our preventive measures are among the most rigorous anywhere, cases that are
detected are pursued with the utmost severity, the assets concerned are immediately frozen and banks at fault are openly penalised.
A variety of criticisms and clichés in circulation concerning Switzerland's financial centre are therefore either false or
inaccurate.”
“However, other financial centres are endeavouring to enhance their competitive edge,
too, and are meeting with success. This means that the Swiss authorities need to adapt and improve the framework conditions,
while the banks themselves have to set out to enhance their services and performance.”
“Conclusions: To conclude, I want to emphasise that Switzerland is fully aware of its
responsibilities as an international financial centre. In view of the challenges posed by globalisation and technological
developments, the reinforcement of multilateral co-operation is absolutely essential. Switzerland is therefore actively involved
in the framing of new international regulations aimed at securing the sound operation of financial markets, and in particular
at combating financial crime. We have also launched a number of initiatives aimed at enhancing the effectiveness of the international
fight against money laundering, financing of terrorism and corruption.”
“Within the framework of ongoing international negotiations, in particular with the
EU and within the OECD, Switzerland will safeguard its legitimate interests firmly and resolutely. We want to improve the
framework conditions for the financial centre still further, taking the importance of safeguarding the private sphere of individual
citizens and meeting the needs of financial institutions fully into account.”
“The Swiss authorities will further upgrade their capacity to combat any abuse of the
Swiss financial centre. At the same time, they expect all financial institutions to act in a manner that is beyond reproach.
It is only by securing an exemplary reputation and enhancing its competitive capacity still further that Switzerland will
be able to effectively deal with mounting turbulences and successfully meet the challenges of the 21st century.”
