Switzerland is a known destination for money from all over the world due to its strict banking secrecy laws and low financial risk. Now an extraordinary leak of data from Credit Suisse, Switzerland’s second-largest lender, has exposed how the bank held billions of dollars.
The infamous case of $60 million in Swiss banks alleged owned by former prime minister Benazir Bhutto and Asif Zardari comes to our mind. Both were accused of receiving multi-million dollar kickbacks and embezzling them in Swiss accounts. The case lapsed after the government failed to issue an appeal within the stipulated time period.
During Nawaz Sharif’s third term, then finance minister Ishaq Dar made the staggering revelation that at least $200 billion of Pakistani money was stashed in Swiss banks. He had quoted a director of Credit Suisse that $97 billion worth of Pakistani capital was deposited only in the bank.
To put that into perspective, Pakistan’s entire external debt can be wiped out with the account and the economic woes will be over. The PTI campaigned on the promise to retrieve the illicit wealth stashed in foreign accounts but has been unable to take corrective action.
In 2014, Switzerland passed a new law after pressure that it was becoming a safe haven for money laundering, approving the freezing, forfeiture and restitution of assets of politically-exposed persons in criminal matters. However, the restitution of assets is a lengthy process with political and legal issues and certainly not possible without the support of the government where they originated.
The latest leak – Suisse Secrets – reveals what we have known for years of how the wealthiest people have exploited secrecy laws to safeguard their accumulated wealth. It is not illegal to own a Swiss bank account but they have been used for corruption and criminal activities while banking laws protect their identity.
The leak highlights the need for reforms in banking sector as the global financial system enables theft and corruption. Every year, trillions of dollars are stolen from developing countries and stashed in offshore accounts of foreign countries. The pilferage of assets must be stopped and countries such as Pakistan need to take action for the restitution of assets stashed abroad.
