A city nestled amidst the snow-capped Anpơ mountains and Lake Geneva as clear as jade. It was here that the French Kings found the ideal place to hide their fortunes. Since the 18th century, the Catholic nobility rushed to Geneva to conceal their transactions with banks under the guise of religious faith. The reason being that in 1713, the government of the Swiss city of Geneva enacted a rule prohibiting bank employees from disclosing details about their customers, and now three centuries later, you will see in movies the wealthy always claim to keep their money in Swiss banks. Does cinema reflect reality accurately, and if so, why do the financial elite love Swiss banks so much.

In reality, Swiss banks can be said to be the best place to keep your money, I mean not only the wealthy but everyone. With a population of less than 9 million people, Switzerland has over 200 banks of all kinds, almost all major banks in the world have branches or representative offices in cities like Zurich, Bern, or Lugano. Renowned as one of the largest banking and insurance centers globally, Switzerland can be considered the birthplace of all banks. In 1913, Switzerland implemented a regulation requiring bank owners to ensure the confidentiality of customer information, any bank that violates this will be heavily fined, and the bank manager will face imprisonment. Therefore, Switzerland has long been known as a secretive fortress, and the rumor that depositing money in Swiss banks is untouchable.

According to Swiss law, banks must know who you are before agreeing to open an account for you, anonymous accounts in Swiss banks are just rumors, but account numbers are real. Swiss banks require customers to visit the bank in person with an ID card or passport if they want to become the owner of an account. However, instead of using the customer's name, the account is assigned a number, meaning only a small group of bank employees know who the owner is. Besides this, numbered accounts do not have any additional advantages in terms of confidentiality compared to regular accounts, no one knows how many numbered accounts there are in banks, but ensuring customer confidentiality and their transactions has become one of the driving forces behind the success and reputation of Swiss banks for centuries.

Any intervention in a customer's account must comply with the law, normally only the account owner and the bank have the right to know the account information. In addition, some bank employees go the extra mile by destroying various documents and hiding valuable assets such as jewelry and artworks that customers purchase with their deposits in these numbered accounts at trusted addresses in Switzerland. Customers can use Swiss credit cards so that tax authorities cannot track their purchases. However, the principle of bank secrecy in Switzerland is not absolute, the country's laws specify under what circumstances bank secrecy must be partially lifted.

Specifically, if a Swiss citizen is suspected of a criminal offense, investigative agencies may present a court order to the bank to obtain necessary information. This also applies to foreign citizens, but the extent to which this is done depends on the agreements signed with each country regulating that Switzerland has strict anti-money laundering laws and banks are not allowed to engage in money laundering or have any connection to criminal activities. But in reality, the secret to the success of Swiss banks lies in the rule of protecting customer information, turning this place into an ideal environment for illegal transactions such as tax evasion or money laundering.

It is estimated that around $2.4 trillion of foreign assets are held in Swiss banks, therefore, the Swiss financial community plays a significant role in opening and managing trust funds along with asset storage systems in other countries and territories. Surely you have heard of Credit Suisse, the second-largest bank in Switzerland, one of the 30 global banks with branches in about 50 countries worldwide. An institution too big to fail, but it did fail. A data leak revealed how Credit Suisse's customers were involved in torture, drug trafficking, money laundering, corruption, and other serious crimes. But before delving into the shocking details, let's remember the era of Swiss banking secrecy was considered to have ended in 2014.

For the first time in history, ministers from 50 countries and territories agreed to exchange global financial information about taxpayers, their meeting in Paris that year was a breakthrough when they successfully forced banks to reluctantly participate. Switzerland promised to share bank account information with tax authorities worldwide. For a country that considered sharing customer information with foreign countries a crime for over 80 years, this was a major turning point when Switzerland adopted what is called the Common Reporting Standard, meaning Switzerland will exchange information with parties about foreign individuals who hold bank accounts in their country, as part of efforts to combat tax evasion and fraud.

However, this creates a paradox, on one hand, Swiss banks receive clean money from banks in foreign countries, on the other hand, Swiss banks receive clean money from banks in developed, industrialized countries. This information is exchanged automatically according to agreements, but what about other countries, developing countries where tax evasion investigators do not have automatic access and the secret accounts of Swiss citizens. No. Bank secrecy laws are still alive, more than 90 countries, including some of the least developed countries in the world, have not exchanged banking information with Switzerland. Nothing has changed, Swiss bank owners are still helping the wealthy in these countries hide their assets from their tax authorities.

In 2022, an investigation revealed that Credit Suisse had held billions of dirty dollars for many decades. 163 journalists from 48 media outlets in 39 countries worldwide analyzed leaked information from over 18,000 accounts with over $100 billion at Credit Suisse. They mainly came from customers in developing countries in Africa, Asia, the Middle East, and South America. These accounts were opened between 1940 and 2010, with the peak in 2007 and 2008 during the global financial crisis. The year with the most closed accounts was 2014 when Switzerland began implementing new regulations on automatic exchange of tax information with foreign residents.

Many account holders come from countries that do not adhere to the Common Reporting Standard to combat tax evasion, including Serbia, where Rodoljub Radulovic, one of the leaders of the largest drug trafficking gang in Eastern Europe, opened an account at Credit Suisse to launder over 3 million euros. Eduard Seidel, a former senior executive of a German telecommunications company in Nigeria, used Swiss Franc accounts worth tens of millions, he was accused of bribing Nigerian officials to secure telecommunications contracts for Siemens. Then there's Muller Conrad "Billy" Rautenbac, a mining tycoon in the Democratic Republic of Congo, who also opened high-value accounts at Credit Suisse. Despite previous allegations of corruption in Congo, there are also names like the son of a former Egyptian president, a former Yemeni spy imprisoned for violence, a Mafia family in the Arab world, or oil industry officials accused of corruption in Venezuela.

The culture that encourages risk-taking to maximize profits and bonuses at Credit Suisse is one of the reasons that led to the bank being willing to overlook mandatory rules when dealing with customers. Credit Suisse employees revealed that there are two sets of rules for two groups of customers, the wealthy and the ultra-wealthy, meaning for accounts below $1 million, customers will be scrutinized down to every detail, but for accounts with exceptionally high value, customer information is kept confidential to the extent that only a few high-ranking bank personnel are allowed access.

After the Credit Suisse incident, Switzerland proposed stringent measures to combat money laundering, at a certain point, banks will only accept clean money, meaning it has been verified that there is no money laundering or tax evasion. Behind the massive deposits, this change is expected to mark the end of the tradition of freely accepting deposits without having to report to the government, a tradition that has lasted for hundreds of years in Swiss banks. This also means that criminals will be somewhat limited in using illicit funds they have earned, which will surely have a significant impact on the attractiveness and profitability of the Swiss banking system. However, this is the price they must pay.

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