The fierce criticism of a US state commission against Switzerland as an accomplice to war criminals and other criminals was massively exaggerated. But outrage is not appropriate. A thicker skin against foreign opinion would do Switzerland good. And not every point misses the point.
The Swiss financial center is once again in international focus.
When the big one verbally beats up the little one, it makes an impression on the little one. This reflects the balance of power and was again textbook this week. The verbal beating of Switzerland at the hearing of an American state commission on Switzerland’s role as a hoard of assets belonging to Russian war criminals and other criminals caused a stir in this country. The commission, which consists of 18 US parliamentarians, had already spoken plainly in its announcement of the event, and the invited speakers did not disappoint the organizers.
The main message of the exercise can be summarized as follows: Switzerland, as a haven of great fortune, has long been helping foreign criminals and is now continuing this tradition by refusing to seriously implement the sanctions against Russia. The banks and lawyers want to do business with everyone, and the authorities are corrupt or incompetent.
That’s not funny. The event was one-sided, from the outset the exercise was not designed to provide information but to beat up Switzerland, the criticism was in some cases far exaggerated, and various points of criticism could also be directed at the USA and other important financial centers with equal justification. But Swiss outrage is not appropriate. You have to be able to endure such events. The commission in question does not reflect the official position of the US government, and bias in public hearings before political bodies to exert pressure is a well-established business model in the US. A slightly thicker skin would do Switzerland good.
And one point of criticism is undoubtedly correct: Switzerland, like any other country, is not inhabited by saints. Business came and often comes before morals. Bank executives don’t always look closely enough at customer assets. Lawyers sometimes allow themselves and their professional secrecy to be abused by using opaque company structures to disguise the ownership of assets. In the past, commodity traders often had no scruples when choosing their business partners.
The Swiss banking secrecy is not the problem. It has long since ceased to apply to criminals, and it no longer protects tax evaders from most countries. When it comes to combating money laundering, Switzerland is neither a role model nor a loser. But Parliament would have done a better job of getting rid of an old point of criticism in 2021: by following the Federal Council and also subjecting lawyers and consultants in connection with services to letterbox companies and trusts to the Money Laundering Act. The success of the lawyers’ uprising against this proposal at the time was based on an exaggeration of professional secrecy and was counterproductive for Switzerland: insisting on the status quo contradicts global standards, makes the country vulnerable and will not be sustainable anyway.
The matter now also complicates the implementation of sanctions against Russia. Banks have had to clarify the true owners of customer assets for a long time. But in the case of real estate with intermediary company structures, the responsible land registry offices are often overwhelmed. At the federal level, a clearer distinction between the group responsible for sanctions and economic development in the State Secretariat for Economic Affairs seems desirable.
Nevertheless, there is no concrete evidence so far that Switzerland would not seriously implement the sanctions against Russia. The sum of the Russian assets frozen so far of around 9 billion Swiss francs appears respectable in an international comparison. Whether the undiscovered fortunes of sanctioned persons in Switzerland are high, low or average naturally remains a mystery.