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Swiss Banks at the Losing End with Flight of Offshore Accounts

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8 years ago

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Swiss National Bank

[vc_row][vc_column][vc_column_text]~Rashme Sehgal

There has been a large flight of capital from Swiss banks even prior to the introduction of the Automatic Exchange of Common Information (AECI) from 2018 signed by over 50 countries who are members of the Organisation for Economic Co-operation and Developments (OECD).

The Swiss banking system has paid a heavy price for handling these unaccounted for offshore deposits especially since several of the smaller Swiss banks had specialised in handling such deposits. The blanket of secrecy surrounding Swiss banking transactions had ensured could they look after deposits of largely unaccounted wealth from well-heeled clients across the globe including India. But this is not going to be the case any longer.

Pressure on the Swiss government to provide details of all account holders has resulted in the outflow of millions of dollars of deposits from these banks thereby causing many of the smaller Swiss banks to shut shop. One such high profile Swiss bank that was forced to file for bankruptcy was Hottinger and Cie which was founded in 1786.

A KPMG study showed that 30 per cent of private banks had recorded losses in 2014-15 which resulted in several thousand bankers being laid off from their jobs.

“The smaller private banks dealing with off shore accounts posted huge losses and the result was that bankers handling these account lost their jobs under the restructuring process,” pointed out Louis Tari, a Geneva-based banking and tax advisor.

“With the introduction of the AECI, information of all non-Swiss residents belonging to the OECD countries will be automatically sent to the federal tax authorities in Berne who in turn will despatch this information to the relevant countries. The authorities in these countries can in turn check if the account holder has declared his income or not,” Tari added.

Zurich based banker Hanspeter Baumgartner pointed out, “What is very significant is that Swiss banks have frozen all accounts of account holders with ‘black’ money informing these holders that they should either regularise their account in their country or else their asset will be frozen. The flip side is that Swiss nationals who had accounts in the Bahamas or in Panama have had to declare their accounts.”

“This has seen an influx of francs into Switzerland but the amount is not very large,” Baumgartner added.

The amount of money of Indian national in Swiss banks has been steadily declining and in 2016 amounted to a mere Rs 4482 crore according to data released by Switzerland’s central bank, the Swiss National  Bank. In 2015, the money deposed was Rs 8135 crore while in 2014 it was Rs 12,350 crore.

The figures being projected by the Indian government that billions of dollars had been stashed in Swiss banks by Indian citizens was largely overstated, analysts believe, as Switzerland never saw such massive deposits from any country.

Nathalie Bersier, a lawyer who works as a consultant for Swiss investments in India, said, “From 2009,  the Indian government has been highlighting the issue of black money without realising that the easiest thing to do  is for a client to close a bank account and transfer the money out. Such a flight of capital has already occurred.”

Bersier believes, “In Switzerland, two years ago the perception was that Indian assets were between $ 900 million to $4 billion. Today I would say, the amount would be less than even $900 million.”

“More than half the undeclared money from India that was stashed in Swiss banks has been moved to Dubai and Singapore from where it would have been invested in real estate, gold or re-entered India through the hawala route,” Bersier maintains.

Former Swiss state secretary for International Financial Matters Jacques de Watteville who had visited India in 2016 to negotiate with his counterparts in the Ministry of Finance had refused to hazard a guess about just how much money has been moved out of Swiss banks to be invested in Dubai or Singapore. “There are no official figures on the assets transferred out of Switzerland,” says Watteville.

While in India he had emphasised that, “Combating the menace of black money and tax evasion is also our shared priority. We discussed the need for an early and expeditious exchange of information to bring to justice the tax offenders.”

Many Indian analysts believe some of this money has been routed to the US with the US government actively encouraging foreigners to deposit money in US banks, no questions asked. Some US states and cities have emerged as veritable tax havens. 

South Dakota, to cite an example, has been described by some analysts as the ‘new Switzerland’ and mention of its role as a tax haven was emphasised in the Panama Papers which highlighted that US offshore assets remain anonymous.

The city of Delaware is also said to be another tax haven with over one million registered entities claiming to operate from there.

The fact is that while international disclosure rules comprising the AECI  have been accepted  by the OECD countries, thhe US has refused to accept them and is not a signatory to it. The US NGO Tax Justice Network has pointed out how the US does not practise what it preaches.

In fact, a Swiss financial analyst on condition of anonymity, has accused the US of having crushed Swiss banks. Since trusts can operate as shell companies in some US states, it is ironical that a Swiss trust company has gone ahead and opened an office in South Dakota. The analyst feels that some of the flight of capital from Switzerland has ended up in the US.

This is because while non-US banks and financial institutions across the world have to reveal American account details, this is not the case with US deposits by offshore account holders.

Bersier does not see too much emerging from the Federal Council consultations with the Indian government on the need to detect, recover and repatriate illegal deposits.

“The key issue is what pressure the Indian government can exert on the Swiss government,” says Bersier. “The US threatened to close all Swiss banks operating in the US which led to the Swiss immediately signing a treaty with the US and UK. There are no Swiss banks operating in India.”

On the subject of the AEOI Information between the Swiss and Indian governments expected to be operationalised by 2018, she remains equally cynical.

Erecting the AEOI platform is all very well, she feels, but it is too little too late. Berseir believes that by the time it becomes operational, all the illegal deposits will have been moved out. There are any number of countries where this money can be moved to.

While some signatories of the AEOI are committed to sharing information from 2017, others will start providing information from 2018. Till then, we have to wait and watch.[/vc_column_text][/vc_column][/vc_row]

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Trump calls it a wonderful gesture as Machado presents him Nobel Peace Prize medal

Donald Trump described it as a “wonderful gesture” after Venezuela’s opposition leader Maria Corina Machado presented him with her Nobel Peace Prize medal during a White House meeting.

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8 hours ago

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January 16, 2026

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donald-trump

US President Donald Trump has described it as a “wonderful gesture” after Venezuela’s opposition leader Maria Corina Machado presented him with her Nobel Peace Prize medal during a meeting at the White House.

Trump praised Machado publicly after the interaction, saying she had been through “so much” and that the act reflected “mutual respect.” He said the medal was given to him for the work he has done, according to his post on his social media platform.

The gesture, however, has drawn attention as the Nobel Institute has clarified that a Nobel Peace Prize cannot be transferred to another individual.

Nobel Institute rules out transfer of prize

The Nobel Institute has stated that Machado is not permitted to give her Nobel Peace Prize to Trump. Despite this, a White House official confirmed that Trump intends to keep the medal, even if the act remains symbolic.

Trump has long expressed interest in the Nobel Peace Prize, making the episode particularly notable despite the formal limitations placed on such honours.

Political context behind the meeting

Machado had been widely regarded as Venezuela’s democratic leader-in-waiting before Trump’s recent policy decisions regarding the country. Earlier this month, Trump declined to fully back her challenge to Venezuela’s ruling regime and instead signalled openness to engaging with leaders linked to the existing power structure.

Trump has publicly questioned Machado’s ability to lead, saying she lacks sufficient support and respect within Venezuela. Her political party is believed to have won the 2024 elections, results that were rejected by President Nicolas Maduro.

Trump has also indicated a willingness to work with acting President Delcy Rodriguez, who previously served as Maduro’s deputy.

What Machado said after the meeting

Speaking to reporters after leaving the White House and heading to Capitol Hill, Machado said she presented the medal to the US president as recognition of his “unique commitment” to Venezuela’s freedom.

She added that Trump did not provide detailed assurances during their closed-door discussion, including on the issue of elections in Venezuela. No further specifics of the meeting were disclosed.

Afterwards, Machado greeted supporters gathered near the White House gates, hugging several of them. Addressing the crowd, she said they could count on President Trump, prompting brief chants of appreciation from those present.

Machado’s recent public appearance

Before her visit to Washington, Machado had largely stayed out of public view since travelling to Norway last month, where her daughter accepted the Nobel Peace Prize on her behalf. She had spent nearly a year in hiding in Venezuela before appearing at the ceremony.

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US freezes immigrant visa processing for 75 countries, India not in list

The United States suspends immigrant visa processing for 75 countries, excluding temporary visas, as part of stricter immigration measures.

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1 day ago

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January 15, 2026

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The United States has indefinitely suspended immigrant visa processing for 75 countries, targeting individuals seeking permanent residency based on nationality. The move, set to take effect on January 21, excludes tourist and temporary work visas, but is expected to have a significant impact on family-based immigration.

Reasons behind the visa freeze

The US State Department said the suspension aims to prevent the entry of foreign nationals likely to require government welfare and public benefits. “The Trump administration is bringing an end to the abuse of America’s immigration system by those who would extract wealth from the American people,” said State Department spokesman Tommy Pigott.

While the administration cites the risk of immigrants draining government resources, studies by the Cato Institute and other research groups suggest immigrants generally use fewer benefits than US-born citizens.

Who will not be affected

Temporary visas for tourists, business travelers, and sports fans remain unaffected. Exceptions are also allowed for individuals with dual nationality, a valid passport from a country not on the list, or travel serving an “America First” national interest. Approved visas that have not yet been printed must be refused according to the State Department.

Countries affected

The visa freeze covers nations across Africa, Asia, Latin America, the Middle East, and Eastern Europe. Some of the most affected countries include Pakistan, Bangladesh, Somalia, Russia, Iran, Afghanistan, Brazil, Nigeria, and Thailand.

Other countries on the full list include Albania, Algeria, Armenia, Azerbaijan, Bahamas, Barbados, Belarus, Belize, Bhutan, Bosnia and Herzegovina, Myanmar, Cambodia, Cameroon, Cape Verde, Colombia, Côte d’Ivoire, Cuba, Democratic Republic of the Congo, Dominica, Egypt, Eritrea, Ethiopia, Fiji, The Gambia, Georgia, Ghana, Grenada, Guatemala, Guinea, Haiti, Iraq, Jamaica, Jordan, Kazakhstan, Kosovo, Kuwait, Kyrgyzstan, Laos, Lebanon, Liberia, Libya, North Macedonia, Moldova, Mongolia, Montenegro, Morocco, Nepal, Nicaragua, Republic of the Congo, Rwanda, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Senegal, Sierra Leone, South Sudan, Sudan, Syria, Tanzania, Togo, Tunisia, Uganda, Uruguay, Uzbekistan, and Yemen.

Trump administration immigration record

The Trump administration has already imposed stricter vetting procedures over the past year, revoking over 100,000 visas and deporting more than 605,000 people, with 2.5 million others leaving voluntarily. Critics highlight that the policy disproportionately affects immigrants from non-European countries.

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Anything less than US control of Greenland unacceptable, says Trump

Donald Trump has said American control of Greenland is vital for national security and missile defence, reigniting debate over the Arctic island’s strategic importance.

Published

2 days ago

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January 14, 2026

By

donald-trump

US president Donald Trump has said that American control over Greenland is essential for the United States’ national security, describing it as “vital” for a planned air and missile defence system known as the Golden Dome.

In a social media post on Wednesday, Trump claimed the United States “needs Greenland for the purpose of National Security” and asserted that the Arctic island plays a key role in the proposed defence architecture. He further said that NATO would become “far more formidable and effective” if Greenland were under US control, adding that “anything less than that is unacceptable.”

Comments ahead of US-Denmark talks

Trump’s remarks came just hours before senior Danish and Greenlandic officials were scheduled to hold talks at the White House with US Vice President JD Vance and Secretary of State Marco Rubio. The discussions are focused on Greenland and broader security issues in the Arctic region.

Responding to US concerns, Denmark’s defence minister Troels Lund Poulsen said the country was increasing its military presence in Greenland. He also noted that Copenhagen was in discussions with allies regarding a stronger NATO footprint in the Arctic.

NATO role and strategic concerns

Trump said NATO “should be leading the way” in building the proposed multi-layer missile defence system. He warned that if the alliance did not act, rival powers could step in, stating that Russia or China might otherwise take the lead.

The US president has repeatedly spoken about taking control of Greenland, a strategically located and sparsely populated island that is an autonomous territory within the Kingdom of Denmark. His renewed comments underline continued US interest in the Arctic’s strategic importance amid rising global security competition.

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