A BEGINNER'S G U I D E T O THE W O R L D E C O N O M Y
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dred-dollar bills, is prized for its liquidity: dollars can be exchanged almost anywhere in the world without raising suspicion. Because of the size and stability of the U.S. economy, the
U.S. dollar has become the "currency of choice" for most players in the underground economies of the world.
69. H O W D O E S A SWISS B A N K A C C O U N T W O R K 2
I
j S W I T Z E R L A N D IS O N E of the few countries in the
world that guarantees, by law, the secrecy of its bank accounts. As long as the client of a Swiss bank has not done anything considered illegal in Switzerland, the bank cannot reveal
the client's identity to anyone. Switzerland is also seen as a safe
.financial haven in a turbulent world.
During World War 11, for example, many families from
war-torn France, Italy, and Germany were able to keep their sav' ings secure in Swiss banks. Many Europeans still consider having a bank account in Zurich, Basel, Lugano, or Geneva to be a
sign of financial security.
Opening a legal, numbered Swiss bank account is still relatively easy to do, usually involving nothing more than going to
', Switzerland, filling out a few forms, and making a deposit. Swiss
bankers are known to be dependable, trustworthy, and, above
11:'~' all, discreet. These qualities made Switzerland a world banking
;Ii/ center, but they have also made Switzerland a center for money
' ,
laundering
Swiss bank accounts are useful for money laundering
I
13 8
R A N D Y CHARLES EPPlNG
schemes because once money passes through a respectable Swiss
bank it is accepted anywhere in the world. Many criminals in
the world economy, from Russian black-marketeers to Third
World dictators, prefer putting their money in Switzerland because of its reputation for honesty and stability.
However, most people holding Swiss bank accounts do
not use them to launder illegally earned money. They merely
want their legally earned funds to be safe and free from government control and taxes at home. Since they can count on the
Swiss to be discrete, citizens from turbulent or high-tax
economies often open Swiss bank accounts.
Swiss bankers will not reveal the accounts of clients accused simply of avoiding taxes. Since tax evasion is not considered "illegal" in Switzerland-it is only a civil, not a criminal,
offense--earnings in a Swiss bank account remain secret from
authorities in the client's home country. Essentially, foreigners
with legally earned money-as long as they break no Swiss
laws--can keep their funds in Swiss bank accounts without fear.
The guarantee of Swiss banking secrecy is often used by
unscrupulous clients for a wide variety of shady international
activities. In the case of the Iran-contra scandals, for example,
the person responsible for handling the secret arms sales to Iran
placed the money in Swiss banks before sending it on to the contras in Central America. These bank accounts were subsequently
opened at the request of the U.S. government.
The Swiss authorities have recently decided to require
every Swiss bank to know the beneficial owner of money in their
accounts. Only those funds earned legally would then be allowed to benefit from the Swiss banking secrecy laws.