Another massive data leak has revealed a lack of due diligence by one of the world’s largest private banks
Last modified on Mon 21 Feb 2022 15.00 EST
Since 2016, successive data leaks have exposed the methods by which some of the world’s most powerful companies and individuals secrete eye-watering sums of money off-shore, beyond the reach of tax authorities and governments. Collaboratively reported by investigative journalists from around the world, the Panama, Pandora and Paradise Papers have held the dark practices and financial chicanery practised by the super-rich up to the light.
This week the Guardian, along with 47 international partners including the Süddeutsche Zeitung and Le Monde, has published the latest addition to this crucial body of work. Also the result of a vast data drop by a whistleblower, the “Suisse secrets” revelations focus on the activities of Credit Suisse, one of the world’s biggest private banks and a traditional giant in Switzerland’s notoriously opaque financial system. Analysis of accounts linked to 30,000 Credit Suisse clients from all over the world suggests that, in multiple cases, a culture of complicity on the part of Credit Suisse has allowed huge sums of dubious provenance to be stashed away with far too few questions asked.
In some of the most egregious cases discovered by our investigative team, it is hard to believe that any proper process of due diligence took place at all. By 2010, just before the Arab spring revolt, an account opened for the sons of the Egyptian dictator, Hosni Mubarak, contained £138m. An attorney convicted in 1992 for money laundering on behalf of the corrupt Philippine dictator, Ferdinand Marcos, was allowed to become a client in 2000. Unbelievably, this was despite the bank having previously been ordered to repay looted funds to the Philippines after opening accounts for Marcos and his wife, Imelda. The accounts of human traffickers, torturers and participants in industrial-scale bribery in the developing world also feature in the leak.
In response, Credit Suisse has argued that most of the cases uncovered by the investigation are historical and practices have since been tightened up. But more than two-thirds of the accounts detailed in the leak were opened after 2000, many were open well into the last decade, and some are still open today. Nor does the bank’s recent track record inspire confidence. Only last autumn, for example, the bank agreed to pay $475m to settle a corruption case relating to a Mozambican tuna fishing project. This is not an institution that seems to have learned lessons when it comes to risk management.
More broadly, the leak suggests that Switzerland’s banking culture remains in need of far-reaching reform. The country’s infamous banking secrecy law – dating back to 1934 – remains in place, criminalising the disclosure of client information. It is true that, in 2018, Switzerland responded to international pressure by requiring its banks to share client data with some foreign authorities. But many developing countries are excluded from that system. Meanwhile, wealthy elites continue to funnel wealth out of cash-strapped countries, hiding their riches and evading the tax payments that would help impoverished governments to stay afloat.
On Monday there were calls from the European parliament’s main political grouping for a review of the EU’s relationship with Switzerland in light of the Suisse secrets investigation. That would be a grave development for a country which has jealously guarded and defended its banks as a source of pride and wealth. The threat of being blacklisted should be a catalyst for necessary change in a sector that has been allowed to exist in the shadows for too long.
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