Paris, Thursday, August 31, 2000 Swiss Discord on Money Laundering
By Elizabeth Olson International Herald Tribune
GENEVA - Two top officials responsible for tracking money laundering in Switzerland resigned this week on grounds the government lacks a comprehensive approach to tackle the problem. Daniel Thelesklaf, head of the federal Money Laundering Reporting Office, had sought the government's permission to strengthen the power and personnel of the two-year-old office, but Swiss officials turned him down. Reached at his office, the 36-year-old lawyer declined comment on his reasons for resigning the post he has held since February 1998.
However, in a speech last week, Mr. Thelesklaf said the government's policy toward combating money laundering lacked ''clear direction.''
Mr. Thelesklaf's No. 2, Mark Van Thiel, also resigned.
Folco Galli, the federal police department spokesman, said the resignations were a logical consequence of a disagreement over how to approach the fight against money laundering. In Geneva, Bernard Bertossa, a prosecutor, told Swiss radio that the resignations were a blow to the country's effort to combat money laundering because it was the only office receiving information from financial intermediaries, which are largely unregulated nonbank asset managers.
Mr. Bertossa also said the resignations would hamper efforts to coordinate information among cantons, which are individually responsible for prosecuting money laundering.
Some analysts surmise that the Swiss banking business, the country's most important industry, has been putting behind-the-scenes pressure on federal and local authorities to ease up on reform because it is frightening away prospective customers.
Privately, some bankers bitterly remark that Switzerland's new openness goes much further than necessary, and is more intrusive than policies of many other countries, including Austria and Britain. Banking critics cited as excessive a Geneva court order this summer requiring that $500,000 in damages be paid to a Russian man acquitted after he was tried as part of the city's effort to show that laundering questionable funds would no longer be tolerated.
Switzerland has been under serious pressure from the United States and its European neighbors to abandon banking secrecy on grounds that tax evaders as well as money launderers can abuse the system. The European Union is pressing Switzerland to agree to exchange information on nonresident savings accounts to prevent tax evasion.
Recognizing that its reputation as a haven for shady assets was damaging its international image, Switzerland has been making very public efforts in recent years to stem illegal money flows. It has passed tough laws requiring banks and other financial intermediaries to report suspicious money movements.
Those efforts have coincided with an increasing international determination to ferret out countries that harbor money gained from questionable sources, including tax evasion and bribery. In June, an international task force published a blacklist of 15 countries accused of failing to adequately curb money laundering, and the Paris-based Organization for Economic Cooperation and Development named 35 countries and territories with lenient laws on tax evasion.
Although Switzerland's banking industry is estimated to manage as much as one-third of the world's offshore wealth, the country avoided being included on either list. In June, Swiss authorities announced that last year they had frozen almost $1 billion in suspicious money, almost five times as much as the year before, which was the first period during which banks were required to report dubious transactions.
Embarrassingly, new cases of troublesome deposits have continued to turn up, including funds linked to the Bank of New York, which is accused of laundering billions in Russian funds. And two-thirds of the suspicious deposits reported was $670 million connected with the late Nigerian dictator Sani Abacha, his families and associates. This was the largest sum of apparently ill-gotten funds uncovered in Switzerland since the discovery more than a decade ago of $550 million deposited here, through a series of foundations, by Ferdinand Marcos, the former president of the Philippines, who died in 1989.