Swiss Money-Laundering Law Has Bankers Shiveri _ Business Standard News money laundering how much cash can i accept

In a state which historically has gone out of its way to protect its bankers from scrutiny, swiss lawmakers are about to do what few of their predecessors dared challenge the countrys famous banking secrecy.

A new money-laundering law due to go into effect on april 1 obliges banks to report suspicious accounts to the state and to freeze assets. It also extends this obligation for the first time to non-bank finance institutions, lawyers and insurers.

In a country that prosecutes bankers for giving out information about a client and treats tax evasion as a civil rather than a criminal matter, the law has sent shivers through swiss financial circles.

This is a strike at the core of private banking. Bankers must start telling clients any information you give us can be used against you, geneva lawyer pierre-andre beguin said.

Private bankers are like family doctors.Money laundering how much cash can i accept they know all sorts of secrets about their clients. But with this law, clients can be denounced by their bankers behind their backs.

The law could change the way bankers do business in a huge industry managing $2 trillion in assets where banks can often be reluctant to question powerful and rich clients too closely.

Some international clients may not like seeing mountains of paper to collect data. They could get nervous, said jean-francois christinet, a senior manager at credit suisse.

The reporting rule does not apply to swiss bank affiliates and branches offshore in what prosecutors see as a crack in the law.

Bankers said capital has already taken fright and reported an increasing number of international clients heading offshore.

Banking secrecy rules have earned switzerland a reputation for equivocation and a willingness to turn a blind eye to dirty money.Money laundering how much cash can i accept it is this image the authorities are trying to change.

Switzerland has already tightened its money-laundering laws, but remains under international pressure to clean up its financial centre a fact genevas chief prosecutor bernard bertossa said banks would ignore at their peril.

Bankers have nothing to fear if they work with clean money. But there are banks that make money from clients who are not clean. Those bankers have reason to be afraid, he told reuters.

At present, bankers have a voluntary right to report suspicious cases but bertossa said they have seldom done so.

In geneva, the capital of swiss private banking, banks have voluntarily reported just 40 suspect cases in the past three years. Of 315 money-laundering cases opened here by bertossa since 1990, a mere 10 per cent has been successfully prosecuted. There are situations when bankers could have given us crucial information but they did not, bertossa said.Money laundering how much cash can i accept

Daniel zuberbuehler, director of the swiss banking watchdog, the federal banking commission, told reuters that bankers who failed to report suspicious clients could go to jail. Bankers are now obliged to report the criminals, he said.

Bankers are confused about how the law will be implemented and when they are meant to be suspicious. The new law is deplorable because it leaves so many questions open. Bankers would like to know the speed limits, said ralph ziegler, board member at banque cantonale vaudoise.

Bertossa, who is investigating some 100 money-laundering cases, said the law was kept deliberately vague and expected test cases that should go some way to clearing up the confusion.

Zuberbuehler expected problem cases to come from previously unsupervised money changers and asset management firms.

Switzerland tightened its laws in the past decade to prevent banks from accepting the ill-gotten gains of crooks, drug lords and criminal groups.Money laundering how much cash can i accept but recent fresh scandals highlight the importance of banks asking major clients questions about the origin of their wealth.

Swiss rules have become tighter and will become even more tighter, said albert gowen, vice-chairman of sarasin bank in geneva. Switzerland is not the easiest place for dirty money.

Added christinet at credit suisse: there was a feeling that bankers were treated like sacred cows in this country because it is such a big industry. But no more.