For decades, a Swiss bank account was the favored hideaway for assets snaffled by the world’s most kleptocratic leaders. The roll of dishonor includes presidents Marcos of the Philippines, Mobutu of Zaire, Abacha of Nigeria, and “Baby Doc” Duvalier of Haiti. But these days Switzerland seems eager to clean up its reputation: last month authorities rushed to freeze the assets of ousted Tunisian leader Zine al-Abidine Ben Ali and Ivory Coast embattled president Laurent Gbagbo. And just last week a new Swiss law took effect that will make it easier to reclaim cash plundered by Third World tyrants.
The recent show of good behavior is surely tied to Switzerland’s deep embarrassment two years ago when the OECD put it on a “gray list” of tax havens that failed to meet international transparency standards. With financial services accounting for more than 10 percent of the Swiss economy, and with up to a third of all cross-border private investments being handled by Swiss banks, the country has been keen to reassure the globe that its banks are experts in wealth management rather than tax dodging.
But the new measures are unlikely to silence the skeptics. Take the new law on returning stolen funds. It will reverse the burden of proof from the victims (who often spent years convincing the court of a despot’s guilt) to the former dictators, who will now have to prove that their frozen assets were earned legally. But this law will apply only to failed states. So Haiti qualifies—but not Tunisia. And most experts agree that dirty money is still reaching Swiss banks despite their diligence.
Figures are hard to estimate, but Swiss banks may be holding $150 billion in looted assets, more than any other financial center, according to Global Financial Integrity in Washington. Says Daniel Thelesklaf of the Swiss-based International Centre for Asset Recovery: “Things have improved, but it is only the tip of the iceberg.” An iceberg that might still sink a country’s reputation.
