Swiss govt proposes new laws against illicit wealth in banks

Facing demands from India and other countries for banking details of persons with alleged black money in Switzerland, the European nation has proposed new rules for combating money laundering and mandating extra due diligence by banks before accepting clients' money.

Switzerland's Federal Council, its top policy making body, has proposed that norms be put through an extensive consultation process till June 15. The proposals come within days of Switzerland promising deepening of dialogue with India on administrative assistance and exchange of information about suspected illicit wealth stashed by Indians in banks there.

At the same time, Switzerland's finance ministry has also made it clear that it would not entertain any banking information requests that are based on stolen or illegally obtained account details, while it has also refused to consider any fishing expedition for Swiss bank details.

In its latest proposals, the Council said it has adopted two consultation drafts �" one for implementation of the revised international recommendations on combating money laundering and terrorist financing, and the other for putting in place an extended due diligence requirement to prevent untaxed assets from being accepted by financial intermediaries in Switzerland.

Last week, Switzerland's Federal Department of Finance, the country's finance ministry, had said in its annual report on international financial and tax matters for 2013 that requests from foreign countries would not be considered if these have been made for the purpose of 'fishing expeditions'.

Switzerland has also refused entertaining requests that are based on information "obtained through acts punishable under Swiss law, such as the illegal acquisition of data." This comes in the backdrop of requests from countries, including India, which are in possession of account details of Swiss bank customers that were allegedly stolen or gathered through illegal means and passed on to governments. With regard to institutionalisation of financial dialogues with India, Switzerland has said that "the first round of financial dialogues got under way with India" in 2012 and the aim now is to deepen these dialogues.

Switzerland has often been accused of providing a safe haven to illicit wealth from various countries, including India, and its tough banking secrecy laws make it difficult for foreign authorities to access details of such accounts. India is probing alleged stashing of untaxed funds in certain Swiss banks. The country has not got details of such funds directly from Switzerland and it is said that these details found their way to India after certain account details were stolen electronically by a third party.