Whether you’re a potentate’s daughter, a crooked financier or a shady oil trader, Switzerland welcomes you with open arms and its many advantages. We don’t ask too many questions or condemn too severely those who embezzle or launder millions. And since money has no smell, bucolic Helvetia and its banks have been able to serenely become a channel for tax evasion and money from criminal activities.
Of course, our country has had to bow to international pressure and make a few changes. But don’t worry – all is not lost! As long as you know the loopholes, Switzerland remains a safe haven for white-collar criminals.
That’s why Public Eye is going to guide you in your corrupt practices, by providing all the information you need to take full advantage of the opportunities Switzerland has to offer. First, a short quiz to get you warmed up!
Dodgy lawyer, potentate’s daughter or commodities trader: test your knowledge of “Made in Switzerland” corruption. With one objective: never getting caught!
Why is Switzerland the dream location for white-collar criminals? Who are the best partners to help you with your wheeling and dealing? Public Eye has now created a Swiss handbook on corruption. It’s a sort of toolbox that will help you take the right decisions at the right time.
Discover all the legal advantages and loopholes that you can benefit from in our beautiful country, as well as tips and tricks that you can use in case you run into problems.
Just a few more years of freedom! On the 19th of March, 2021, the consultation on amendments to the AMLA (Anti-Money Laundering Act, 1997) was partly discarded. The new text proposed the application of this legislation to lawyers who set up, manage or administer your shell companies or your trusts. The competent parliamentary committee, which includes several lawyers, refused, considering that this step would represent “a serious challenge” to professional secrecy.
The result is that your Swiss advisors still do not have any obligation in terms of due diligence or verification. They are not obliged to denounce your misdeeds to the Swiss Money Laundering Reporting Office (MROS) unless they are signatories for one of your bank accounts.
Unlike your lawyers, Swiss bankers have been subjected for nearly twenty-five years to the Anti-Money Laundering Act (AMLA). In theory, the justice system can accuse them of three types of wrongdoing: they can themselves be accused of money laundering; nailed for not having adequately clarified the origin of the funds and the beneficial owner of the companies; or even be prosecuted for having violated their obligation to report suspicions.
But rest assured: you can be certain that there will be no repercussions if your banker is simply crassly negligent! For example, if he maintains that he didn’t notice certain financial transactions – even though they were blatantly fraudulent –, he may get away with paying a very small fine. However, there is no risk of a sanction if the courts have not been able to prove the criminal origin of the funds.
The stab in the back, however, may well come from your bankers or asset managers. They who treat you with so much respect are obliged, in the case of “well-founded” suspicion, to contact the Money Laundering Reporting Office (MROS). This is the revered “self-regulation”! The procedure is somewhat twisted, and one can easily understand that your interlocutors sometimes give up, playing with semantics. In the case of a “simple” suspicion, or if you refuse to submit certain supporting documents, the banker may discreetly advise you to change your bank. No one would have to know.
Nothing like the system that exists in France, where any deposit or withdrawal in cash in excess of 10,000 euros on an account triggers an alert to the national financial intelligence unit. And most banks systematically communicate information on any transaction over 150,000 euros where the genuine beneficiary has not been clearly identified.
Your asset manager has taken the plunge. He’s reported a suspicious business relationship to the Anti-Money Laundering Reporting Office Switzerland (MROS) and – alas – you haven’t been able to transfer the funds to Lithuania to pay the former Ukrainian Minister of Transport. Your accounts are frozen. Fortunately, the financial intelligence unit that received the report only has around forty people toiling day and night in archaic conditions, according to the former head of MROS.
In 2020, more than 6000 disclosures issued by the banks had not yet been processed. In a quarter of these cases, the unfortunate employees had to copy to their computers – one figure at a time – the banking data received by post. Whole boxes of documents, perhaps including yours, were at risk of being scrapped during this lengthy process. Since 2021 – in theory at least –, banks have been obliged to submit their files in electronic form only. However, not all of them do so. There’s still some room for manoeuvre!
Has your company been searched? Don’t panic – you can always run rings around the Swiss justice system, by ensuring that the seized documents will not be handed over to the investigators for several months, or even years. All you have to do is wave article 248 of the Swiss Criminal Procedure Code! This article provides for certain documents to be “sealed” and for the criminal authorities to be prevented from inspecting or using them, on the pretext that it concerns information covered by a secret protected by law.
In other words, if the police has confiscated your company’s hard drive, simply argue that it contains information that is personal or protected by secrecy laws: for example, correspondence with your lawyers. The procedure will then come to a standstill until an independent court takes a decision. It’s always worth playing this game if you’re counting on a statute of limitations to get away with it.
Let’s assume that you have amassed your wealth through your hard work, and deposited it in secure Swiss bank accounts. Officials in your home country are now accusing you of having acquired this wealth illegally. They’re even asking Switzerland for judicial assistance!
You’re in luck, because Switzerland is particularly fussy when it comes to this type of request. If it’s not precise enough, it’s very likely that the request will be rejected for purely formal reasons by the meticulous official handling it.
The blow came from abroad, and the Swiss justice system caught you in its net! Lithuania sent a request for judicial assistance to the Office of the Attorney General of Switzerland in Bern. The Baltic judges want to receive all the bank documents that concern you, because it turns out that the former Ukrainian Minister of Transport, to whom you made generous payments, has been arrested in Vilnius and came clean. The Swiss are about to send the evidence.
There’s only one solution: oppose it by lodging an appeal, even under false pretences! This will enable you to stall for several months, or even a year. You can appeal twice: first to the Federal Criminal Court and then to the Federal Supreme Court, Switzerland’s highest court. The delaying tactic is always useful.
You need an empty-shell company to defraud the taxman or to conceal a dubious transaction? On the vast market of offshore shell and sock-puppet companies, Swiss lawyers and trustees have recognised expertise. They figure among the most active of their kind in setting up substance-free organisations and schemes designed to evade justice. Their favourite hangouts: Panama, the British Virgin Islands, and even Switzerland.
On the Web, clever crooks offer their services to “create a company in Switzerland without being a resident” in just a few clicks. To create the illusion, some of them offer a company concierge service with real Swiss telephone numbers, as well as call and mail forwarding, for 99 francs a month. And since Switzerland refuses to create a publicly accessible national register of the companies’ ultimate beneficial owners, your identity will never be revealed. In Geneva, Zug or Lugano, one can already imagine the cryptic name of your company on a mailbox.
You got caught. Fortunately, in 2007, a revision of the Swiss Criminal Code introduced automatic suspension for custodial sentences of less than two years. So, as a white-collar criminal, you risk little more than a small fine and the obligation to return the stolen money.
Swiss law-makers are decent people! If it’s impossible to charge you directly for your crimes or offences, Article 102 of the Criminal Code provides for a maximum penalty of five million francs for your company for its inadequate organisation. A pittance! On top of the fine, the prosecutor can order a compensation claim. This is not a real penalty, but rather a deduction from illegally obtained gains.
As you can see, Swiss law is custom-made for honest people like you!
Are you in the business of selling oil or metals? Don’t hesitate to choose Switzerland to register your trading company. Your first stop should be Geneva. The city of Calvin is home to banks that will finance you, and the players in this field are swarming there: from trading giants to small traders, without forgetting resourceful businesspeople. Just like a big family! There is also Zug – the legendary Swiss German town that has been a launching-pad for some big shots in this sector – and its attractive tax benefits.
In the Swiss Commercial Registry, only the names of your subordinates (administrators or directors) will appear, and you’ll be able to remain hidden behind your limited company. Last but not least, a major advantage: contrary to bankers subject to the Anti-Money Laundering Act (AMLA), and banks overseen by the supervisory authority (FINMA), you – the commodities traders – are not subject to any due diligence. You do not have to take any precautions when choosing your business partners or oil-barrel providers. Isn’t life great?
What bad luck: your assets have been frozen by the Swiss justice system because of your inability to justify their legal origin. Your banker was scared by the latest articles published by the local investigative journalists. He protected himself by mentioning your name to the Money Laundering Reporting Office (MROS). Effectively, this will ensure that his bank can keep the funds – and the interests they generate – for years, provided that the courts in your country have not been able/willing to prove their illegal origin. This is often the case. Once the legal deadline has expired, the funds will probably be released or, if you are no longer with us, returned to your descendants.
Are you a politically exposed person (PEP) who wants to invest bribes received in Cyprus? Aren’t you excited at the idea of buying a château or a luxury manor with a view of Lake Geneva? What are you waiting for? In Switzerland, the lawmakers still don’t consider it necessary to subject the real estate sector to the Anti-Money Laundering Act (AMLA). Your brokers and notaries are not obliged to verify the origin of your funds, and they won’t ask any awkward questions.
To ensure that the transaction can’t be traced, don’t buy in your name. Instead, use a straw man (or woman), or offshore companies registered in various tax havens. The ideal scheme? Pay for your property without going through a Swiss bank, thanks to a complex game of loans from several fictitious entities that you control. Once you’ve acquired your property, you can use it to obtain a loan from a respectable Swiss bank or use false invoices for enormous building projects at inflated prices. There you are, your money is now laundered!
It’s all falling apart! After the anonymous numbered accounts, which for decades brought smiles to the faces of tax evaders and drug-money launderers, it’s now the turn of bearer shares to be thrown overboard by Switzerland. The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes and the Financial Action Task Force (FATF) are to blame for this. The latter organisation had been calling for their repeal for twenty years. This system allowed for shares to be issued without the banks or authorities knowing the identity of the holders. You had until the 30th of April 2021 to convert your bearer shares to nominative shares. Many of you appreciated this!
Get to know lawyers, bankers, compliance officers, auditors and accountants, but also prosecutors and politicians. If it’s sufficiently rewarding, some of them can become facilitators of corruption. Any resemblance to actual persons, living or dead, would be unflattering.
Everyone has the right to be defended, even the worst criminals. Some Swiss lawyers have interpreted this principle broadly. When he’s not busy requesting the disqualification of the prosecutor, or blocking requests for judicial assistance until a statute of limitations has expired, the lawyer can play the role of “financial middleman” or “consultant”, going as far as organising the domiciliation of shady companies, the setting-up of foundations in Liechtenstein, or designing complex offshore schemes.
A man of letters and witty guy, he’s exchanged his robe for a briefcase; holding court in hushed lounges and offering his eloquence to the highest bidder. You really have to see him in action, this Voltaire without a cause, in a world that he secretly abhors, and where the superficiality of quick profits reigns. After all, it’s easy to defend a widow or an orphan, but who’s prepared to take a beating for a crooked billionaire?
He never recognised himself in the character that Jean Dujardin played in the film The Wolf of Wall Street. What a clown, and what a caricature of Switzerland! The level of English of the Geneva banker is much better than that of the French actor, especially having obtained an executive MBA at Harvard. As for the supposed affairs with the girlfriends of his business contacts, that’s not quite the reality; they are anathema to his Protestant good manners, his business sense, and – in spirit – to the self-regulation in force in the financial sector.
When criticised, the banker repeats his criticisms of the ever-changing enforcement procedures. However, he’s shown that he can adapt to anything, even if it means turning into a tax inspector to preserve banking secrecy. But how does one maintain trust-based relationships with clients or countries that can find themselves under sanctions overnight? No more millions pouring into the sector or big bonuses at the end of the year. But who says so?
At lunchtime, the compliance officer eats alone. She isn’t solitary by nature, but discussions with certain colleagues can be heated. The profile of this specialist in risk avoidance – a civil servant of client mistrust – does not blend well with that of shark bankers sailing on the high seas. In her bank, the “compliance officer” is considered as a cost centre; her mission is to oppose business interests.
“Gate-crasher, coupe-bonus, aguafiestas” – the nicknames used for her flourish in every language. However, it’s not her fault if so many “banking relations” are suspect. The compliance officer had indeed brought attention to the meteoric rise of that Venezuelan client, who progressed from bodyguard to Finance Minister. “What utter nonsense!” It was not until the media got hold of the case that she was allowed to report the situation to the Anti-Money-Laundering Office (MROS). So the compliance officer sighs, alone with her salad bowl.
It’s well-known that trading is a profession where contacts are essential. The middleman has made it his gospel, and he always has his address book in hand. With his frowning face and predatory grin – or sometimes a picture of normality –, he’s made himself indispensable in those countries where one doesn’t ask too many questions. To complete the picture, the media like to recall his military background, his past as a secret agent or his involvement in the diamond trade. Whatever. Tanned by the sun of Central Africa, with old scars all over his body, the “rain-maker” remains convinced that he is a self-made man. Though he used to sell nappies in Africa, he’s now become an expert in iron ore mining!
The best part of the job? Life between two worlds: the harsh reality of the mines, and the palaces of harbour cities. In spite of the bowing and the friendly pats on the back, this commission payer keeps in mind that he remains an embarrassing element for trading houses, incompatible with their impressive brochures vaunting corporate social responsibility. To avoid being sacrificed, the pawn continues tirelessly to roll the boulder up the hill: to make himself indispensable.
Just a phone call away, she’ll help you structure your complex of companies. Less qualified than her “cousin”, the lawyer, who will even offer to administer your holding company, the trust officer is all the more discreet. On her website, she has written her own biography, which takes up two paragraphs. In it, she describes herself as a great lover of Spanish/Brazilian/Russian culture {delete according to your target market}. You’ll also learn that it’s possible to set up your own offshore company in 24 hours, “without corporate or income tax”, “without VAT”, “without the obligation to maintain accounting documents or books”. A white-collar criminal’s dream!
For more personalised advice on tax or judicial avoidance, the trust officer is discreetly at your disposal in her office. An office where dozens of companies, all answering the same telephone number, are also domiciled.
With negative interest rates prevailing, why not invest in property? And where better than in our beautiful country, Switzerland? These are the questions hinted at by the business card that the estate agent hands to the super-rich. Opportunistic by nature, she’s been working the brokerage market for twenty-five years. Russian, Uzbek, Indian and Chinese families, and their desire for marble and underground tennis courts – she’s seen it all. Her task: to sell a little bit of Helvetia, with oriental kitsch as a bonus.
The advantage of this fine country? Its stability, its neutrality, its guarantee of generating capital gain when you sell your property and, of course, few questions asked during transactions.
He looks like the man in the street. In another life, the auditor could have been an accountant or a provincial civil servant. In this one, he audits the accounts of big companies based in Switzerland. To put it another way, the auditor is commissioned and paid by a multinational to check the authenticity of its financial data. “Well, someone has to pay for the audit”, he usually replies when you bring up the issue of conflict of interest in his Big-4 auditing and consulting company. Counterfeiters and smooth talkers: shudder in the face of such integrity! And if you’re not happy with the result, you just have to try your luck with less diligent auditors.
Moreover, the auditor has integrity. Nothing like his “cousin”, the auditor who provides consulting to multinationals. He – the auditor who audits – had refused to sign off on the audit of the trading company with 100 million of unjustified expenses. The company had to call upon another local auditor before the prosecutor could stick his nose in. Don’t let it be said that this system doesn’t work!
“Trust me – I’m a lawyer.” On the radio or in the Sunday papers, the lawyer-politician is always ready to stress his professional status to justify the torpedoing of the latest Anti-Money Laundering Act or the freezing of a national register of “beneficial owners”. During plenary sessions, lawyer-politicians blend in with farmers and other consultants; in committees, they exploit all their corporate potential. Gregarious by nature, they vote as one man, countering any attempt at reform that might affect their core business. But the lawyer-politician also knows how to find allies for his cause.
His star has faded since the recent turmoil. But the role of the Attorney General of Switzerland is as central as ever to solving major corruption cases. Shame that the prosecutor’s kill count isn’t in proportion to the “game” that can be found in our lands. And what can we say about those major cases that are likely to fail, or where postponement of a session is enough to exceed the statute of limitations?
No matter how much the prosecutor blames legislative loopholes, the impossible cooperation with jurisdictions where potentates reign, or the hindrance of lawyers, his responsibility is engaged in the quagmire of the Office of the Attorney General of Switzerland (OAG).
Familiarise yourself with all those little local things that will make your life all the sweeter and facilitate your illicit dealings. Thank you, Switzerland!
In Switzerland, whistleblowers are still regarded as highly suspicious individuals, and even traitors. For eighteen years now, Parliament has rejected, at regular intervals, a law intended to protect them. Little or no risk then that one of your employees, who had uncovered your malpractice(s), might denounce you. They would have far too much to lose, e.g., finding themselves in court for violation of official secrecy. This kind of misadventure happens more often than you might think.
If you want to avoid any checking by the authorities, you can always opt for a private vault, where you can hide your gold ingots, your cash or your confidential documents. They’re ultra-secure and managed by private companies that – unlike banks – have no compliance obligations and are devoid of any curiosity. Regardless of your place of residence and nationality, an identity document is all you need to obtain a vault, either in your name or that of a company.
Switzerland doesn’t want to give up its 1000 franc note, and rightly so. This makes it possible to organise interesting cross-border transactions to transfer dirty money or undeclared funds. Just imagine: 500,000 francs can be fitted in a plain A4 envelope. Money-launderers particularly appreciate being able to carry away millions, concealed in their private jet or car. And if you don’t want to be checked, put a baby-seat in the back of your vehicle. This advice was recently given by a former Federal Prosecutor, now retired.
Who said that the rich don’t like to give? It’s paying taxes that they hate, but if you offer them channels to invest wherever they want, they will quickly become kind patrons of art and culture. We’ve lost count of those charitable foundations, considered to be for the “public good”, registered in Switzerland by billionaires and their wives. Checks are minimal and no one will ask you why you are donating several millions to schools in Dagestan. Think about it: philanthropy turns tax evasion into a noble act and, what’s more, it’s tax-deductible!
Until recently, you couldn’t tell the difference between Manet and Monet. But now that you’re a billionaire, you owe it to yourself to have a collection of paintings. It’s an investment that enhances you and a discreet way to evade taxes or launder your money. Switzerland makes its free ports and open customs warehouses available to you. In these ultra-secure bunkers, you can store your works of art duty and tax (VAT) free, and sell them in complete discretion without the goods changing location. This is called a “no-gain transaction”. Admittedly, legislation has become stricter, requiring you to draw up an inventory of your treasures and providing for unannounced customs checks. But don’t worry: you can avoid your name appearing on the documents by hiding behind a forwarder, a company, a trust or a straw man or woman. Easy and totally legal!
As of 1st January 2022, foreign punitive financial sanctions are to be tax-deductible “in exceptional cases (…) if they violate Swiss public policy or if a company credibly demonstrates that it has taken all reasonable steps to comply with the law”. Unfortunately, the Federal Council didn’t want to include kickbacks paid to individuals. Sometimes you wonder what the lawyer-politician is doing in Parliament!
You don’t want your money to be returned to those from whom you took it away? Switzerland may be able to help! Indeed, for the past two decades, it has prided itself on being the champion in the restitution of seized potentate funds, but there are still big holes in the system.
The clan of former Tunisian president-dictator Ben Ali (who died in 2019) could eventually get back some of his millions stashed in Switzerland. In January 2021, the asset-freeze ordinance had reached the statutory maximum duration of ten years, and the second stage of the freeze depends on the smooth functioning of mutual judicial assistance between Switzerland and Tunisia. In other words, time is not on the side of the victims of the Ben Ali clan’s corruption .
Geneva took a more pragmatic view and auctioned off the “supercars” of Teodorin Obiang – son of the Equatorial Guinean dictator – who was quick to buy them back via a nominee. Have the victims been betrayed twice? Well, it’s the intention that counts!
When it wants to, Switzerland has a real sense of hospitality. Wealthy people come here from all over the world. In view of the large number of international civil servants, the choice of international schools and other institutions for wealthy under-achievers is flourishing. You can enrol your offspring for tuition fees of up to 130,000 francs a year, with the assurance that he or she will be rubbing shoulders with the sons and daughters of oligarchs and ministers. Excellent for establishing his or her future network! You will also find a wide range of clinics that will perform your dialyses or rejuvenate you before your next election campaign. And let’s not forget that there are also plenty of luxury chalets and villas, and that in Swiss towns the cultural offering can sometimes be spectacular. This should make your whole family happy!
