Switzerland has announced a strict due diligence regime for its banks to ‘reject’ accepting illicit funds from both existing and new customers. Swiss banks, would also terminate relationships with existing clients who are found to have access to illegal assets in their accounts. Switzerland had been making efforts to do away with banking secrecy practices so as to eliminate it from the tag of a safe haven for stashing untaxed assets including by Indians.
The latest move by the shareholders can be seen as Switzerland is making announcements via public names, including that of Indians, among scores of foreign nationals with Swiss bank accounts, for being probed in their respective home countries.
New due diligence requirements
- The new due diligence requirements by the Swiss government for banks and other financial institutions, are aimed at making Switzerland a “tax-compliant financial centre”.
- Swiss government also said that banks and other financial intermediaries in future would have to comply with enhanced due diligence requirements when accepting assets in order to prevent the inflow of untaxed assets.
- The Federal Council, the highest decision making body in Switzerland, has referred a corresponding dispatch on amending the Anti-Money Laundering Act to Parliament in this regard.
- Financial intermediaries would have to put in place a risk-based assessment when accepting assets to determine whether or not the assets have been duly taxed.
- The business relationship would not be terminated in cases where it is not possible for the client to provide proof of tax compliance or to regularise the tax situation without running the risk of unreasonable adverse effects.
