For twelve years now whistleblower Rudolf Elmer has been fighting Swiss banking secrecy, with court case after court case. He’s been imprisoned, victimised, and his family has been harassed. His reputation has been systematically ripped apart in a way that we believe has been intended as a deterrent to other potential whistleblowers. We’ve regularly covered his battles against the Swiss “justice” system. For more background, he wrote a guest blog for us here on how Switzerland corrupted its courts to nail him.
The good news is that in the end the high court in Zurich turned down efforts by the prosecution to convict him of breaking Swiss banking secrecy laws in 2016. Now some may be sleeping less peacefully in their beds in India because he says if the Federal Supreme Court also rules in his favour in the current case going through the courts he’ll release the Julius Baer account data he still holds. He says this data contains the names of Indian politicians, film stars and sports personalities, among others.
And he apparently has plenty more data where that came from on Mexican drug-lords and even police officers. He’s ready to cooperate with any government that’s serious about getting access to, and investigating the data he has once his legal case is over. Until then, releasing it could risk another house search by the prosecution. He’s appealing a $350,000 fine and some allegations of threats made towards banking staff. He tells TJN that “the goal is really to abolish Swiss banking secrecy law through international pressure and use Swiss Banking secrecy as a model to get across that the world doesn’t need such laws and in fact they’re hurting civil society.”
There’s an excellent article in The Wire featuring an interview with Rudolf Elmer on the current state of play with his case, the situation globally and in Switzerland, which we rank number one in our Financial Secrecy Index (the next index will be out in 2018). This is based on its high secrecy score and a large global scale weight for the size of offshore financial services, at around five percent of the world total.
Asked how much things have changed when it comes to cracking down on potential abuse for sale, Elmer says:
“In my view, generally speaking, yes there is a lot of talk. But actually not that much has changed, to be crystal clear. At the moment it appears that Swiss bank secrecy is gone. But as a matter of fact it still exists and is applied strictly within Switzerland…Actually, the business of secrecy has become even more lucrative…It has become more lucrative because even today, it is pretty simple to set up complex corporate structures where the beneficial owner is not known.”
Indeed. He speaks of high net worth individuals:
“Today, they know they are forced to do something in order to protect their offshore wealth. Today, they are forced to invest more money in creating a complicated and untouchable financial structure.”
And when it comes to huge multinational companies,
“Look at what happened in Switzerland with HSBC, Geneva in 2015. It was the first time that authorities conducted a house and company premise search of a well-known bank in Switzerland. The government filed a complaint not over assisting tax evasion but the serious crime of money laundering! Eventually, HSBC simply paid 40 million Swiss francs to close the legal case. Now, here the Prosecution Office came to the conclusion HSBC, Geneva is a bank engaging in a…possible criminal act. But…HSBC put money on the table and agree to cough up fines.”
Elmer speaks of the conflicts of interest among the powerful meant to be protecting citizens from abuses, the need for public information since he doesn’t trust authorities to do the job that’s needed without public scrutiny and describes fines on banks as ‘parking tickets.’ He believes, as we do, that it’s a case for political pressure and ultimately, sanctions:
“Primarily, I believe, it is an issue of sanctions. India, for instance, could put pressure on Swiss industry or even the Swiss government. Not only on the banking industry but also on big companies. Pressure on Nestle, Roche, Novartis etc, e.g. threatening not to allow business in India anymore if there is no reasonable cooperation on tax matters and particularly by the Swiss financial industry. Politically, India can put pressure. Your government can put pressure on any Swiss multinational conglomerate, in my view.
Therefore, India could tell them if the Swiss government doesn’t cooperate on the tax issue matter, then there is no place in India for Swiss multinationals. You could even withdraw or delay licences for banks. No business for them [the companies] in India.”
He points out that cooperation by blocs on this, for example the BRICS nations, is ideal for this. When it comes to India he believes that the agreement that country has with Switzerland for the recovery of stolen assets isn’t fit for purpose:
“Officially, in the vast majority of cases, Switzerland still takes the position that if it is stolen data it will not cooperate with other countries. The key clause here is through “official means” or “normal administrative means”.”
He’s also critical of the automatic information agreement India has signed with Switzerland which comes into force in 2019, speaking of the crucial role civil society must play to bring pressure to bear on their politicians to take meaningful action and to invest in the capacity of their tax authorities to be able to handle all the new information coming to them as a result of information exchange. It would certainly pay off handsomely.
The full article is well worth reading in full here.