Dirty Money In Little Countries and their Abettors

In September 2010, CBC-TV reported that 1,785 Canadians are hiding money in HSBC Bank in Switzerland. The Opposition in Parliament demanded the government press criminal charges against those named in documents received leaked by a former bank employee.

The Tax Justice Network (TJN) has designated Switzerland the least transparent, that is the most secretive, in financial matters, in the world. What is this mountainous region hiding?

Despite evidence of wrong doing, the Canadian government is about (October 2010) to sign an agreement with the Swiss government which allows Canadian accounts to remain hidden. In the future, if the government presents credible evidence of Canadian laws being violated, application may be made to the bankers in yodel land. Thus, the victim must apply to the perpetrator-enabler who will decide if the evidence is credible.

The Swiss government said it would agree to exchange information with other countries on a case-by-case basis for "specific and justified" requests. In the land that gave us the cuckoo clock, tax evasion is a national pastime. (This nation's actions in moving Nazi-confiscated money during the Second World Was are part of its glorious history.)

The United States Department of Justice has exposed fraud abetted by UBS, Switzerland's largest bank. There are an estimated 52,000 tax-dodging Americans hiding about $15-billion in UBS accounts. Rather than face prosecution for conspiracy to defraud the American people, the bank agreed to open its books and pay a $780-million penalty.

It paid the fine.  By October 2010, the bank still refused to open its books claiming that release of clients' names would place their employees in danger of prosecution. Well yes, that's the idea. The 60 staff members knowingly involved in the scam deserve punishment.

The bank also contends that release of clients' names violates Swiss privacy laws and constitution. Thus the government is complicit in what would be a crime in any other country.

Counting on the public's short-term memory, in January 2011, UBS ran a series of feel-good ads in The New York Times.

British tax authorities plan to chase 50-billion Euros in unpaid tax on money sent abroad to Switzerland and Luxembourg.

The Swiss government is involved in this global conspiracy. It enjoys the taxes paid by banks on its revenue from these accounts amounting annually to about $120 million. In return, the government enacts laws designed to protect this globally harmful practice.

This is particularly strange. In 1991, Switzerland's Federal Banking Commission announced that the country would abolish "most" of its anonymous accounts. This, in a bid to rehabilitate the nation's reputation by forcing tax dodgers to hide their money elsewhere. More than twenty years later, little has changed.

U.S. prosecutors have also launched a criminal investigation into American clients of HSBC with accounts in Asia. In a similar probe, German authorities have raided all 13 branches of Credit Suisse. This bank harbours an estimated 80 billion dirty dollars. Britain has joined the hunt for untaxed earnings held by 6,000 of its richest and most powerful.

The Boston Consulting Group says that nine trillion (yes, trillion) of untaxed money is stashed in these accounts. Switzerland accounts for at least $1.8 trillion of it.

It's time to punish nations such as Switzerland whose economies float on the dirty money of the world (listed below). Some of these pieces of land would not even exist as nations were it not for their destructive banking services. Honest people do not need accounts hidden from legitimate scrutiny. 

The civilized world must boycott nations offering safe haven for the ill-got proceeds of tax dodgers, tin-pot dictators, tyrants and Ponzi scheme operators. According to the Canadian Centre for Policy alternatives, these people annually evade taxes amounting to more than $250 billion.

Yasser Arafat tucked away $5-billion in Switzerland, Luxembourg and the Cayman Islands. Auditors have traced to Swiss banks $240-million in the names of the sons of deposed Egyptian dictator Hosni Mubarak. Augusto Pinochet of Chile hid $25-million in foreign banks. How much of the Ugandan treasury did Idi Amin stow in such accounts? Ferdinand Marcos of the Philippines? Suharto of Indonesia? Gaddafi of Libya? The deposed Shah of Iran siphoned off millions into foreign banks.  Moussa Traoré has stashed away much of  the wealth of Mali. How much of the Afghanistan treasury has the Karzai family moved to Swiss banks? 

Taxes estimated at $35-billion annually are lost to the debt-stricken Greek economy by 2,059 of its wealthiest citizens.  Their $3.3 billion is in the Geneva branch of HSBC.  

In October 2010, the names of these Greek tax evaders (the Lagarde list) was given to the former Greek finance minister.  He is accused of removing from the list the names of three of his relatives, claiming that someone else had erased the names.  In October 2012, the list was published by an independent magazine. The journalist, Costas Vaxevanis, was arrested and charged with invasion of privacy. His lawyers have informed him of other pending charges. "The case was a top story in the international press," Vaxevanis said, "but not in the country where it took place." 

Owners of hidden accounts do not receive interest.  Rather, they pay an annual fee.  Therefore, if the access number should die with the tyrant, the Swiss bank will eventually take the entire account.  In the meantime, have free use of that money for its own purposes.

Former Haitian dictator Jean-Claude "Baby Doc" Duvalier is a special case. In the decade before his ouster, he embezzled at least $500 million which he deposited with UBS. By January 2011, Duvalier learned that chateau living is expensive, so his hoard had dwindled to $6 million. So, Baby Doc returned to Haiti in hopes of getting more. Haitians also wonder where the $300 million, Duvalier's friends stole from the treasury of that impoverished island has been deposited. The issue remains unsettled.

Where would these little countries be without money from deposed Liberian president Charles Taylor, Zimbabwe's blood-diamonds Robert Mugabe, the self-serving war lord Hamid Karzai of Afghanistan, Omar al-Bashir of Sudan? Fingers also point to corrupt leaders of Ukraine as Swiss bank patrons.

Word is that Libya's Gadhafi family have billions of dollars salted away in Dubai. A probe into the assets of deposed (January 2011) Tunisian leader Ben Ali and his 33 of his family extends to Switzerland.

The world must also condemn nations whose banks and governments benefit from blood diamonds, weapons dealers, drug lords, slave traders, crime syndicates and money launderers, as well as garden variety tax evaders.

American authorities have obtained documents showing that the bank runs similar operations for about 5,000 Canadians and the $5.6-billion they have hidden in UBS. The Canadian government must follow the American lead and expose our home-grown tax evaders, drug dealers and other criminals.

Wealthy Americans have now (2011) withdrawn almost completely from Swiss banks. This, as a result of the global clampdown on tax evasion and that dispute between U.S. authorities and UBS.

 July 23, 2012

Research by TJN states that offshore havens are currently hiding $32 trillion in non-taxed wealth. It sets the amount of lost annual tax revenue to national governments at $280 billion. This does not include non-financial assets such as real estate, yachts, gold, diamonds and racehorses.

This ability to hide money especially harms the economies of 139 developing countries, the report continues. It estimates that since the 1970s, the richest citizens of these countries had amassed $7.3 to $9.3 trillion of "unrecorded offshore wealth".  This represents "a huge black hole in the world economy", according to TJN economist James Henry. 

November 2, 2012

A letter to the Globe and Mail from a Liberal Senator reads in part: "The case of Canadians with secret bank accounts in Liechtenstein is well-known. A list of 106 Canadians with accounts totalling more than $100-million was given to Ottawa in 2007. Five years later, less than one-third of the money owing has been collected. And not a single charge."

January 5, 2013

The United States has been pursuing tax dodgers through a combination of pressure on offshore havens  and amnesty programs at home.  In December, UK-based HSBC Holdings (Europe's largest bank by assets)  paid US$1.9-billion settlement with the American government for its activities in money laundering in aid of drug traffickers.

To that same end, Switzerland's oldest bank, Weglin, paid U.S. authorities $57.8 million for its conspiracy to help Americans evade taxes. The bank's managing partner said its behaviour is common in Swiss banking. The bank went out of business permanently, telling is, in effect, its entire operation was of this nature.  

Switzerland's State Secretariat for International Financial Matters is negotiating with U.S. officials for an industry-wide settlement. This tends to confirm the suspicion that every Swiss bank is in the business of sheltering the world's dirty money. 

Of the 8O  tax havens in the world, places that provide legal and financial secrecy, the Tax Justice Network lists the  ten worst offenders. In TJN order:  Maldives, Nauru, Antigua and Barbuda, Netherlands Antilles, Bermuda, Brunei Dar es Salaam,  Bahamas, Belize, Grenada, Guatemala, St. Kitts and Nevis, Lebanon, St. Lucia, Liechtenstein, Liberia, Marshall Islands, Macau, Montserrat, Seychelles, Turks & Caicos, Samoa, British Virgin Islands.

March 19, 2013

The Argentine government has accused HSBC Holdings PLC of conspiracy to hide bank accounts, thereby helping private companies to evade tax payments and launder money.