The withdrawal tax imposed by Finance Minister P Chidambaram in this year's Budget may not be the only way to track down black money especially money flowing out of India.
The Switzerland government, on the eve of President APJ Abdul Kalam's visit to the country, appears anxious to assure governments world over that its records are open for scrutiny and that "Switzerland is no longer the place to hide illegal funds".
According to William Frei, deputy head of the political division on finances, the Swiss government has already frozen 80 bank accounts, which are related directly or indirectly to the Al Qaeda and also the Taliban. "The amount this adds up to is nearly 34 million Swiss Franks or $25.5 million," he said.
This was not always the case, and Frei is the first to admit that despite having a 'Know Your Customer' law in 1977, the "Swiss banking system has been misunderstood".
After September 11, 2001, the United States got tough and it resulted in a July 2003 Money Laundering Act, where lack of due diligence could result in the withdrawal of a bank's license. Frei proudly states that "we (the Swiss government) received the highest recommendation from the US anti-terrorism authority this year".
Not just terror money, the Act also covers money gained through corruption. "We have to perforce keep track of certain 'politically exposed persons," says Frei. No one can open a Swiss bank account by correspondence, under the Mexico Convention, 2003, and banks have been told to display 'due diligence' while accepting money.
"The Swiss government has returned nearly $700 million of Ferdinand Marcos' money to the Philippines government in August 2003. Alberto Fujimori, former President of Peru, also had his account frozen amounting to nearly $77 million, which was repatriated to Peru," said Frei.
Former Nigerian leader Suny Abacha's account was also frozen (it contained $200 million), while another $450 million in various other accounts was returned to Nigeria.
All this, however, definitely runs against the Swiss instinct for privacy and anonymity and Frei is the first to admit it.
"The banks have to act as detectives, whereas, its not their job. In any case, there are many destinations for suspect money to go, like the Caribbean," he says.
