Swiss banks may no longer be a reliable storage for the funds the origin of which is questionable. The Swiss authorities have recently opened secret bank accounts of former presidents of Egypt and Tunisia - Hosni Mubarak and Zine El Abidine Ben Ali, as well as of Libya's Gaddafi.

According to Swiss authorities, the county has frozen the accounts worth $954 million in total. As many as $415 million belong to Gaddafi, $470 million - to Mubarak and $69 million - to Ben Ali.

Ali's and Mubarak's accounts were frozen after the presidents had been toppled. The Swiss authorities believe that the officials simply stole the money from their own people. As for Libya, Switzerland decided not to wait for the toppling of Muammar Gaddafi. Fierce battles in Libya continue, but Gaddafi's accounts were frozen soon after the riots began.

The law, which allows to conduct such operations with foreign accounts, is known as the Duvalier law (after Haiti's former dictator Jean-Claude Duvalier). It is a new law that came into effect on February 1. The law is based on the experience with accounts of General Sanni Abacha, who stole millions and millions of dollars from the people of Nigeria. It was decided to invest the funds from the general's accounts into the agrarian reform in the African country. However, ten percent of the amount disappeared without a trace. This time, Switzerland will control the spending.

It not ruled out, though, that the above-mentioned amounts are only a tip of the iceberg. According to the Swiss National Bank, Hosni Mubarak's accounts are worth $4 billion. Independent experts say that Swiss credit institutions may store over 150 billion US dollars, the origin of which is questionable.

Ivan Rodionov, a professor of the Supreme School of Economics, told Pravda.Ru that such practice exits for 15 years already or even longer.

"There is nothing extraordinary about it. North Africa has been the center of world attention for months. That is why people are showing increased interest in everything that touches upon the region. The things that Switzerland is going to do will be very good for the economies of those countries. It will also teach others a lesson. As for the procedure to wire the funds, Switzerland will have to discuss the details with new administrations. It also means that anyone who owns large amounts of money may lose it all in an instant. It is extremely difficult to prove the pure nature for hundreds of millions or billions of dollars," the expert said.

Expert Nikita Zagladin believes that the decision of the Swiss authorities to deliver the funds of Ben Ali, Mubarak and Gaddafi to the people of those countries creates an adequate precedent.

"There were such incidents before, but it was going about the arrest of accounts over financial crimes committees by the holders of those accounts. It was mostly done upon the request from the USA or the International Criminal Court. This time, it goes about something different. First and foremost, it goes about prominent politicians. Gaddafi has not been toppled, but his name is on the list along with the toppled presidents. In other words, it means that they can take away the money from a sitting head of state. To take the money away, one does not have to prove that the money was stolen. The Swiss authorities may simply decide that depositor's evidence is not sufficient enough to provide a clear picture about the origin of the money.

"There are many various offshore zones and "safe harbors" on the planet. However, smart people need to realize that there is a storm in the quietest and safest harbor - Switzerland. It means that they have absolutely no guarantees to save the money that they export," the expert said.

Sergei Balmasov

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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Comments

srhardy
08 May 11, 20:56

only an idiot banks with the swiss...

I have known for almost 10 years that only an idiot banks with the swiss, even i know its small neighbour Luxembourg is a better place to bank as the royal family are all heads of the banks and that means the promise pf secrecy means something.

Some years ago a disgruntled employee sold a list of name & balances for clients around the world to virtually all tax departments internationally from Luxembourg. In the wash (tv investigative documentaries) up i discovered this is the last place in Europe with real secrecy laws. Thats not to say the US can lean on them but usually they will not oblige, even with duress...

The swiss dont protect depositors, not since they kept the Nazi gold stolen form European Jews and most of the laws were to pretent to 'help' return it. The US has used these laws to force disclosure.

The bigest tax doge, money laundering nation is still England! Its also where all the bankers that lost/stole all the money from the Icelandic banking collapse went to so they could keep the illegal bouns they paid themselves!

I guess the climate is better in England than iceland after all....

Paul_B
09 May 11, 10:21

Swiss banks are garbage

You are about as safe depositing money in Switzerland as you are in Zimbabwe. There is nothing new in this aberrant behaviour of theirs. And you don't have to be suspected of coming by your money "improperly" to be at risk of Swiss seizure. Remember back in 1984, the UK miners' strike? The two heads of the miners' union, fearing the Thatcher government might freeze their UK accounts, withdrew all their members' funds and deposited them in Switzerland. That was a bad move. The Swiss authorities, without even any prompting from the UK authorities, stuck their hands up and said, "we've got the miners' funds here! Would you like them frozen and returned?"

So there you go. This wasn't drugs money. This wasn't stolen money. This wasn't laundered money. Yet the Swiss told the world about it and froze it. So much for Swiss banking secrecy!

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