Bank secrecy
Encyclopedia
Bank secrecy is a legal principle in some jurisdictions under which bank
s are not allowed to provide to authorities personal and account information about their customers unless certain conditions apply (for example, a criminal complaint has been filed). In some cases, additional privacy is provided to beneficial owners through the use of numbered bank account
s or otherwise. Bank secrecy is prevalent in certain countries such as Switzerland
, Singapore
, Lebanon
and Luxembourg
, as well as offshore bank
s and other tax haven
s under voluntary or statutory privacy
provisions.
Created by the Swiss Banking Act of 1934, which led to the famous Swiss bank, the principle of bank secrecy is always considered one of the main aspects of private banking
. It has also been accused by NGOs and governments of being one of the main instruments of underground economy
and organized crime
, in particular following the class action suit against the Vatican Bank
in the 1990s, the Clearstream
scandal and the terrorist attacks of September 11, 2001
. Former bank employees from banks in Switzerland (UBS, Julius Baer
) and Liechtenstein (LGT Group) have testified that their former institutions helped clients evade billions of dollars in taxes by routing money through offshore havens in the Caribbean and Switzerland. One of these, Rudolf M. Elmer
, wrote, "It is a global problem...Offshore tax evasion is the biggest theft among societies and neighbor states in this world." The Swiss Parliament ratified on June 17, 2010 an agreement between the Swiss and the United States governments allowing UBS to transmit to the US authorities information concerning 4,450 American clients of UBS suspected of tax evasion.
Advances in financial cryptography
(e.g. public-key cryptography
) could make it possible to use anonymous electronic money
and anonymous digital bearer certificates for financial privacy
and anonymous Internet banking
, given enabling institutions (e.g. issuers of such certificates and digital cash) and secure computer systems.
by eminent French personalities, including politicians, judges, industrialists, church dignitaries and directors of newspapers, who were hiding their money in Switzerland. He called these men of "a particularly ticklish patriotism
", who "probably are unaware that the money they deposit abroad is lent by Switzerland to Germany
". The Peugeot
brothers and François Coty
, of the famous perfume family, were on his list. Since then, Swiss banks have acquired worldwide celebrity due to their numbered bank accounts, which critics such as ATTAC NGO alleged only help legalized tax evasion, money laundering
and more generally the underground economy
.
Under the Swiss principle of bank secrecy, privacy
is statutorily enforced, with Swiss law strictly limiting any information shared with third parties, including tax authorities, foreign governments or even Swiss authorities, except when requested by a Swiss judge's subpoena
. However banking is not strictly anonymous since under its banking law all Swiss bank accounts, including numbered bank account
s, are linked to an identified individual. This law only permits a bank to share information with others in cases of severe criminal acts, such as identifying a terrorist's bank account or tax fraud, but not simple non-reporting of taxable income (called tax evasion in Switzerland). Under pressure from the G20 and the OECD, the Swiss government announced in March 2009 that it will abolish the distinction between tax fraud and tax evasion
in dealings with foreign clients. The distinction remains valid for domestic clients. Any bank employee violating a client's privacy could be punished quite severely by law. After signing 12 new double taxation treaties in accordance with the international standard set by the OECD, Switzerland was removed from the grey list of non-compliant tax jurisdictions.
UBS was caught red-handed by the United States government offering tax evasion strategies, sending undercover bankers with encrypted computers to the United States. After it was caught, UBS paid a $780 million penalty and handed over hundreds of client files to American authorities. In 2010, the Swiss and the United States governments negotiated an agreement allowing Swiss bank UBS to transmit to the US authorities information concerning 4,450 American clients of UBS suspected of tax evasion.
In the aftermath of the UBS and Julius Baer banking cases, some wealthy clients who continue to use offshore accounts are turning to private banks in Singapore and Hong Kong. In addition to the local Singapore or Hong Kong banks, offices have been opened in those localities by a number of Swiss private banks. The move to Singapore and Hong Kong is an alternative to the banking secrecy that Swiss banks have come under attack for. Singapore has bank secrecy provisions comparable to those in Switerland. Although Hong Kong does not have the same bank privacy laws, it offers flexibility in the creation of opaque companies that can serve as tax conduits.
Many offshore bank
s, located in tax haven
s such as in the Cayman Islands
and Panama
, also have strict privacy laws.
. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion
, or other criminal activities.
created many new rules for American banks in an attempt to defeat bank secrecy. A list of such banks or shell banks are given to the U.S. banks who are not allowed to wire money to them. All new customers to American banks must now be asked if they are U.S. citizens. If not, they must state their occupation and whether they expect to be wired foreign monies.
Numbered bank accounts, used by Swiss banks and other offshore banks located in tax havens, have been accused by NGOs such as ATTAC of being a major instrument of the underground economy, facilitating tax evasion and money laundering. After Al Capone
's 1931 condemnation for tax evasion, "mobster Meyer Lansky
took money from New Orleans
slot machines and shifted it to accounts overseas. The Swiss secrecy law two years later assured him of G-man
-proof-banking. Later, he bought a Swiss bank and for years deposited his Havana casino take in Miami accounts, then wired the funds to Switzerland via a network of shell and holding
companies and offshore accounts", according to journalist Lucy Komisar
. Joseph Stiglitz, 2001 Nobel
laureate for economics, told Komisar:
In 1999, a class action suit against the Vatican Bank
criticized the role of Switzerland during World War II
. Governments of developing countries
accused Swiss banks of detaining most of the money stolen by corrupt
dictators, which Oxfam International estimate to about $50 billion a year deposited in offshore tax havens, nearly the size of the $57 billion annual global aid budget.
Also in 1999, according to Lucy Komisar, banks "orchestrated a successful e-mail campaign to Congress" to "sink a 'know your customer
' regulation proposed by the Federal Deposit Insurance Corporation
".
In 2001, the United States learned that the Swiss had protected the bank that handled finances for Osama Bin Laden
. One of them, the Bahrain International Bank, had funds transiting through non-published accounts of Clearstream
, which has been qualified as a "bank of banks" and was involved in one of Luxembourg
's major financial scandals.
, The Wall Street Journal
and the Los Angeles Times
revealed that the United States government
, specifically the US Treasury Department and the Central Intelligence Agency
, had a program to access the SWIFT
transaction database after the September 11th attacks rendering bank privacy severely compromised.
novels/movies or more speculatively in The DaVinci Code novel/movie, the instrument is often used by writers for villains to hide assets.
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s are not allowed to provide to authorities personal and account information about their customers unless certain conditions apply (for example, a criminal complaint has been filed). In some cases, additional privacy is provided to beneficial owners through the use of numbered bank account
Numbered bank account
A numbered bank account is a type of bank account where the name of the account holder is kept secret, and he identifies himself to the bank by means of a code word known only by the account holder and a restricted number of bank employees, thus providing the holder with a degree of bank privacy in...
s or otherwise. Bank secrecy is prevalent in certain countries such as Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Lebanon
Lebanon
Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...
and Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
, as well as offshore bank
Offshore bank
An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. These advantages typically include:...
s and other tax haven
Tax haven
A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....
s under voluntary or statutory privacy
Privacy
Privacy is the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively...
provisions.
Created by the Swiss Banking Act of 1934, which led to the famous Swiss bank, the principle of bank secrecy is always considered one of the main aspects of private banking
Private banking
Private banking is banking, investment and other financial services provided by banks to private individuals investing sizable assets. The term "private" refers to the customer service being rendered on a more personal basis than in mass-market retail banking, usually via dedicated bank advisers...
. It has also been accused by NGOs and governments of being one of the main instruments of underground economy
Underground economy
A black market or underground economy is a market in goods or services which operates outside the formal one supported by established state power. Typically the totality of such activity is referred to with the definite article as a complement to the official economies, by market for such goods and...
and organized crime
Organized crime
Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
, in particular following the class action suit against the Vatican Bank
Class action suit against the Vatican Bank and others
Alperin v. Vatican Bank is a class action suit by Holocaust survivors against the Vatican Bank and Franciscan Order filed in San Francisco, California on November 15, 1999...
in the 1990s, the Clearstream
Clearstream
Clearstream Banking S.A. is the clearing and settlement division of Deutsche Börse, based in Luxembourg and Frankfurt. Clearstream was created in January 2000 through the merger of Cedel International and Deutsche Börse Clearing...
scandal and the terrorist attacks of September 11, 2001
September 11, 2001 attacks
The September 11 attacks The September 11 attacks The September 11 attacks (also referred to as September 11, September 11th or 9/119/11 is pronounced "nine eleven". The slash is not part of the pronunciation...
. Former bank employees from banks in Switzerland (UBS, Julius Baer
Julius Baer Group
Julius Bär Group is a Swiss banking firm which is the parent company of Bank Julius Bär, a traditional private bank based in Zurich, Switzerland. The firm dates itself back to the year 1890, when an exchange office was founded by Ludwig Hirschhorn und Theodor Grob. Joseph Michael Uhl and Julius...
) and Liechtenstein (LGT Group) have testified that their former institutions helped clients evade billions of dollars in taxes by routing money through offshore havens in the Caribbean and Switzerland. One of these, Rudolf M. Elmer
Rudolf Elmer
Rudolf Elmer is a former employee of Swiss bank Julius Bär. He worked for the bank for close to two decades, the last position being overseeing the Caribbean operations of the bank for eight years until his dismissal in 2002...
, wrote, "It is a global problem...Offshore tax evasion is the biggest theft among societies and neighbor states in this world." The Swiss Parliament ratified on June 17, 2010 an agreement between the Swiss and the United States governments allowing UBS to transmit to the US authorities information concerning 4,450 American clients of UBS suspected of tax evasion.
Advances in financial cryptography
Financial cryptography
Financial cryptography is the use of cryptography in applications in which financial loss could result from subversion of the message system.Cryptographers think of the field as originating in the work of Dr David Chaum who invented the blinded signature...
(e.g. public-key cryptography
Public-key cryptography
Public-key cryptography refers to a cryptographic system requiring two separate keys, one to lock or encrypt the plaintext, and one to unlock or decrypt the cyphertext. Neither key will do both functions. One of these keys is published or public and the other is kept private...
) could make it possible to use anonymous electronic money
Electronic money
Electronic money is money or scrip that is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems...
and anonymous digital bearer certificates for financial privacy
Financial privacy
Financial Privacy is a blanket term for a multitude of privacy issues:*Financial Institutions ensuring that their customers information remains private to those outside the institution. Issues include the Patriot Act, and other debates of privacy vs...
and anonymous Internet banking
Anonymous internet banking
Anonymous Internet banking is the proposed use of strong financial cryptography to make electronic bank secrecy possible. The bank issues currency in the form of electronic tokens that can be converted on presentation to the bank to some other currency...
, given enabling institutions (e.g. issuers of such certificates and digital cash) and secure computer systems.
Swiss Banking Act of 1934
Bank secrecy was codified by the 1934 Swiss Banking Act following a public scandal in France, when MP Fabien Alberty denounced tax evasionTax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
by eminent French personalities, including politicians, judges, industrialists, church dignitaries and directors of newspapers, who were hiding their money in Switzerland. He called these men of "a particularly ticklish patriotism
Patriotism
Patriotism is a devotion to one's country, excluding differences caused by the dependencies of the term's meaning upon context, geography and philosophy...
", who "probably are unaware that the money they deposit abroad is lent by Switzerland to Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
". The Peugeot
Peugeot
Peugeot is a major French car brand, part of PSA Peugeot Citroën, the second largest carmaker based in Europe.The family business that precedes the current Peugeot company was founded in 1810, and manufactured coffee mills and bicycles. On 20 November 1858, Emile Peugeot applied for the lion...
brothers and François Coty
François Coty
François Coty was a French perfume manufacturer, newspaper publisher, and founder of the fascist league Solidarité Française...
, of the famous perfume family, were on his list. Since then, Swiss banks have acquired worldwide celebrity due to their numbered bank accounts, which critics such as ATTAC NGO alleged only help legalized tax evasion, money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
and more generally the underground economy
Underground economy
A black market or underground economy is a market in goods or services which operates outside the formal one supported by established state power. Typically the totality of such activity is referred to with the definite article as a complement to the official economies, by market for such goods and...
.
Under the Swiss principle of bank secrecy, privacy
Privacy
Privacy is the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively...
is statutorily enforced, with Swiss law strictly limiting any information shared with third parties, including tax authorities, foreign governments or even Swiss authorities, except when requested by a Swiss judge's subpoena
Subpoena
A subpoena is a writ by a government agency, most often a court, that has authority to compel testimony by a witness or production of evidence under a penalty for failure. There are two common types of subpoena:...
. However banking is not strictly anonymous since under its banking law all Swiss bank accounts, including numbered bank account
Numbered bank account
A numbered bank account is a type of bank account where the name of the account holder is kept secret, and he identifies himself to the bank by means of a code word known only by the account holder and a restricted number of bank employees, thus providing the holder with a degree of bank privacy in...
s, are linked to an identified individual. This law only permits a bank to share information with others in cases of severe criminal acts, such as identifying a terrorist's bank account or tax fraud, but not simple non-reporting of taxable income (called tax evasion in Switzerland). Under pressure from the G20 and the OECD, the Swiss government announced in March 2009 that it will abolish the distinction between tax fraud and tax evasion
Tax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
in dealings with foreign clients. The distinction remains valid for domestic clients. Any bank employee violating a client's privacy could be punished quite severely by law. After signing 12 new double taxation treaties in accordance with the international standard set by the OECD, Switzerland was removed from the grey list of non-compliant tax jurisdictions.
UBS was caught red-handed by the United States government offering tax evasion strategies, sending undercover bankers with encrypted computers to the United States. After it was caught, UBS paid a $780 million penalty and handed over hundreds of client files to American authorities. In 2010, the Swiss and the United States governments negotiated an agreement allowing Swiss bank UBS to transmit to the US authorities information concerning 4,450 American clients of UBS suspected of tax evasion.
In the aftermath of the UBS and Julius Baer banking cases, some wealthy clients who continue to use offshore accounts are turning to private banks in Singapore and Hong Kong. In addition to the local Singapore or Hong Kong banks, offices have been opened in those localities by a number of Swiss private banks. The move to Singapore and Hong Kong is an alternative to the banking secrecy that Swiss banks have come under attack for. Singapore has bank secrecy provisions comparable to those in Switerland. Although Hong Kong does not have the same bank privacy laws, it offers flexibility in the creation of opaque companies that can serve as tax conduits.
Many offshore bank
Offshore bank
An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. These advantages typically include:...
s, located in tax haven
Tax haven
A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....
s such as in the Cayman Islands
Cayman Islands
The Cayman Islands is a British Overseas Territory and overseas territory of the European Union located in the western Caribbean Sea. The territory comprises the three islands of Grand Cayman, Cayman Brac, and Little Cayman, located south of Cuba and northwest of Jamaica...
and Panama
Panama
Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...
, also have strict privacy laws.
U.S. Bank Secrecy Act of 1970
The United States' Bank Secrecy Act (or BSA) requires financial institutions to assist government agencies to detect and prevent money launderingMoney laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion
Tax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
, or other criminal activities.
USA PATRIOT Act
The 2001 USA PATRIOT ActUSA PATRIOT Act
The USA PATRIOT Act is an Act of the U.S. Congress that was signed into law by President George W. Bush on October 26, 2001...
created many new rules for American banks in an attempt to defeat bank secrecy. A list of such banks or shell banks are given to the U.S. banks who are not allowed to wire money to them. All new customers to American banks must now be asked if they are U.S. citizens. If not, they must state their occupation and whether they expect to be wired foreign monies.
Actions by European countries
European countries had long complained that banking secrecy provisions in countries such as Austria, Liechtenstein, Luxembourg, and Switzerland favored tax evasion by their citizens, particularly the citizens of countries such as Belgium, France, Germany and Italy which border one or more of those countries. In 2009 tensions reached a height and concerned countries (supported to some extent by other countries) raised the issue at the OECD and the G20. As a result, essentially all countries agreed to implement tax treaties that would facilitate the exchange of banking information in case of suspected tax evasion.Tax evasion and money laundering
Jurisdiction with what other countries view are excessive protections benefitting dubious parties are sometimes known as secrecy havens, by analogy with tax havens.Numbered bank accounts, used by Swiss banks and other offshore banks located in tax havens, have been accused by NGOs such as ATTAC of being a major instrument of the underground economy, facilitating tax evasion and money laundering. After Al Capone
Al Capone
Alphonse Gabriel "Al" Capone was an American gangster who led a Prohibition-era crime syndicate. The Chicago Outfit, which subsequently became known as the "Capones", was dedicated to smuggling and bootlegging liquor, and other illegal activities such as prostitution, in Chicago from the early...
's 1931 condemnation for tax evasion, "mobster Meyer Lansky
Meyer Lansky
Meyer Lansky , known as the "Mob's Accountant", was a Polish-born American organized crime figure who, along with his associate Charles "Lucky" Luciano, was instrumental in the development of the "National Crime Syndicate" in the United States...
took money from New Orleans
New Orleans, Louisiana
New Orleans is a major United States port and the largest city and metropolitan area in the state of Louisiana. The New Orleans metropolitan area has a population of 1,235,650 as of 2009, the 46th largest in the USA. The New Orleans – Metairie – Bogalusa combined statistical area has a population...
slot machines and shifted it to accounts overseas. The Swiss secrecy law two years later assured him of G-man
G-Man (slang)
G-Man is a slang term for Special agents of the United States Government. It is specifically used as a term for a Federal Bureau of Investigation agent....
-proof-banking. Later, he bought a Swiss bank and for years deposited his Havana casino take in Miami accounts, then wired the funds to Switzerland via a network of shell and holding
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
companies and offshore accounts", according to journalist Lucy Komisar
Lucy Komisar
Lucy Komisar is a New York City-based investigative journalist. She writes about offshore banking, corporate secrecy, international money laundering, and how they relate to corporate fraud; international corruption; the looting by dictators; financing of terrorism; international crime including...
. Joseph Stiglitz, 2001 Nobel
Nobel Prize
The Nobel Prizes are annual international awards bestowed by Scandinavian committees in recognition of cultural and scientific advances. The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895...
laureate for economics, told Komisar:
- "You ask why, if there's an important role for a regulated banking system, do you allow a non-regulated banking system to continue? It's in the interest of some of the moneyed interests to allow this to occur. It's not an accident; it could have been shut down at any time. If you said the US, the UK, the major G7 banks will not deal with offshore bank centers that don't comply with G7 banks regulations, these banks could not exist. They only exist because they engage in transactions with standard banks."
In 1999, a class action suit against the Vatican Bank
Class action suit against the Vatican Bank and others
Alperin v. Vatican Bank is a class action suit by Holocaust survivors against the Vatican Bank and Franciscan Order filed in San Francisco, California on November 15, 1999...
criticized the role of Switzerland during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. Governments of developing countries
International development
International development or global development is a concept that lacks a universally accepted definition, but it is most used in a holistic and multi-disciplinary context of human development — the development of greater quality of life for humans...
accused Swiss banks of detaining most of the money stolen by corrupt
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
dictators, which Oxfam International estimate to about $50 billion a year deposited in offshore tax havens, nearly the size of the $57 billion annual global aid budget.
Also in 1999, according to Lucy Komisar, banks "orchestrated a successful e-mail campaign to Congress" to "sink a 'know your customer
Know your customer
Know Your Customer refers to both:* The activities of customer due diligence that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant information pertinent to doing financial business with them* And the bank regulation which governs...
' regulation proposed by the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
".
In 2001, the United States learned that the Swiss had protected the bank that handled finances for Osama Bin Laden
Osama bin Laden
Osama bin Mohammed bin Awad bin Laden was the founder of the militant Islamist organization Al-Qaeda, the jihadist organization responsible for the September 11 attacks on the United States and numerous other mass-casualty attacks against civilian and military targets...
. One of them, the Bahrain International Bank, had funds transiting through non-published accounts of Clearstream
Clearstream
Clearstream Banking S.A. is the clearing and settlement division of Deutsche Börse, based in Luxembourg and Frankfurt. Clearstream was created in January 2000 through the merger of Cedel International and Deutsche Börse Clearing...
, which has been qualified as a "bank of banks" and was involved in one of Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
's major financial scandals.
U.S. Terrorist Finance Tracking Program
A series of articles published on June 23, 2006, by The New York TimesThe New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
, The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
and the Los Angeles Times
Los Angeles Times
The Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
revealed that the United States government
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
, specifically the US Treasury Department and the Central Intelligence Agency
Central Intelligence Agency
The Central Intelligence Agency is a civilian intelligence agency of the United States government. It is an executive agency and reports directly to the Director of National Intelligence, responsible for providing national security intelligence assessment to senior United States policymakers...
, had a program to access the SWIFT
Swift
The swifts are a family, Apodidae, of highly aerial birds. They are superficially similar to swallows, but are actually not closely related to passerine species at all; swifts are in the separate order Apodiformes, which they share with hummingbirds...
transaction database after the September 11th attacks rendering bank privacy severely compromised.
Trusts as vehicles for tax evasion and money laundering
According to a book published in 2010 by an investigative journalist, the successful campaign to limit bank secrecy will likely lead to an increase use of trusts, mostly based in the UK or the USA. Such trusts can be used for tax evasion and money laundering.Bank secrecy in popular culture
The notion of Swiss banks and secret numbered accounts has been widely used in post-war literature and cinema. Whether quite realistically in James BondJames Bond
James Bond, code name 007, is a fictional character created in 1953 by writer Ian Fleming, who featured him in twelve novels and two short story collections. There have been a six other authors who wrote authorised Bond novels or novelizations after Fleming's death in 1964: Kingsley Amis,...
novels/movies or more speculatively in The DaVinci Code novel/movie, the instrument is often used by writers for villains to hide assets.
See also
- European Union withholding taxEuropean Union withholding taxThe so-called European Union withholding tax is a withholding tax which is deducted from interest earned by European Union residents on their investments made in another member state, by the state in which the investment is held....
- Private bankPrivate bankPrivate banks are banks that are not incorporated. A private bank is owned by either an individual or a general partner with limited partner...
- Safe deposit boxSafe deposit boxA safe deposit box or wrongly referred to as a safety deposit box is an individually-secured container, usually held within a larger safe or bank vault. Safe deposit boxes are generally located in banks, post offices or other institutions...
- World Jewish Congress lawsuit against Swiss banksWorld Jewish Congress lawsuit against Swiss banksThe World Jewish Congress lawsuit against Swiss banks was launched to retrieve deposits made by victims of Nazi persecution during and prior to World War II.-Negotiations:...
- Anonymous Internet bankingAnonymous internet bankingAnonymous Internet banking is the proposed use of strong financial cryptography to make electronic bank secrecy possible. The bank issues currency in the form of electronic tokens that can be converted on presentation to the bank to some other currency...
- Hottinger & CieHottinger & CieHottinger & Cie, founded in 1968 in Zurich, is the principal company of the Hottinger Group, it is one of the successor of the private banking firm established in Paris by Hans-Konrad Hottinger . Since its foundation in 1786 it was very active in European economic life...