Sunday, February 1, 2009

Indian Black Money in Swiss Banks

Indian Black Money in Swiss Banking System

On 1st February, 2009 Navbharat Times (Hindi Daily) Newspaper published a Story regarding Indian Black Money in Swiss. News not clear about its object. However, in or about March, 2008 I received an Email from one Chartered Accountant friend of Delhi , who actually received the same from another CA from Chennai. After receipt of the aforesaid Email I posted Emails to Switzerland Banking Association requesting them to confirm the authenticity of the same, because the figures mentioned in the aforesaid Email regarding India were more or less corroborating with my study, which I had made and mentioned in July 2005 and afterwards to His Excellency Mr. Kofi A. Annan, the then Secretary General UNO, and Parliament Members and other Authorities of the different Governments and Countries. Finding no response from the Association, I reminded through Email making it clear that I am going to publish it in my List. Only thereafter, on 16/04/2008, I published the same in my list as well Email-Groups, as a result this message is reached about One Lakh Email users. Thereafter, Transparency International, India Chapter got published the same in its own name as a Lead News Item in the Times of India. Since then same were roaming in the Email Circle . However, no one can claim about authentic figure of the Indian Black Money in Swiss Banking System. Whereas the Government of India is not ready to act on this very important issue of National Importance, to create any pressure upon the Swiss Banks or Banks from other countries too, since this is well roaming reports that Huge amount of the Black Money of the Corrupt Politicians, Bureaucrats and Mafia people from India are deposited in the Swiss Banking System and also Banks from other countries, as were created by the some of Western Countries, as well as recently created by USA.

On dated 9th August, 2007, I submitted 2 application under RTI Act, 205, to the Prime Ministers Office to know actual volume of Indian (black) money deposited in Switzerland’s Banks as per rough estimates of the Government of India and that what action have been taken to retrieve such money from Switzerland to strengthen Indian Economy?, and that about two years ago United Nations Convention Against Corruption (UNCAC), gave a chance to retrieve such money from Switzerland, provided India make appropriate law to that affect to recover such stolen Indian Money and prevent them to retain such money any further. But, till date India not ratified such Convention, and wanted to know that what are the reason and hurdles in rectification of such Convention? But, Government failed to supply appropriate information, rather trying to escape on the alleged pretext of alleged exemptions under RTI Act, 2000.

However, one of the hundreds of Email Messages posted by me in 2005 is mentioned below, in which I also mentioned a List of Resolution time to time passed by UNO, and also send copies of the same to Swiss and Indian Parliamentarians, Ministers and others. In response to my following Emails, I received several responses, through Emails.

Milap Choraria

Dated 1st July 2005

His Excellency Mr. Kofi A. Annan,
Secretary General,
United Nations Organisations,
through Director,
Mr. Sarbuland Khan,
Department for Economic and Social Affairs,
New York ( USA )

His Excellency Sir,

This is Most Humble Appeal on behalf of myself and my organisation (Movement for Accountability to Public) as well as other supporting organizations and individuals from around the world, to the world's highest body responsible for Global Governance, to take appropriate cognizance in respect of Illegal Policy of certain countries, prevailing in severe violations of the Universal Declaration of Human Rights, which directly fueling enormous corruption, international terrorism, crime, and significantly damaging the growth and developments in developing nations, under the garb of their own laws and constitution. We must actively try to block the arteries that supply illegal money to terrorists and antisocial elements so that the world can be a safer and happier place.


First of all a question may arise in the mind of His Excellency that why State Members of UNO not raised the issue referred herein. In this context my Humble submission is that most of the Governments running in developing and democratic Countries like India , are working under heavy pressures from various quarters including corrupt but powerful and influential politicians, bureaucrats and unscrupulous businessmen, who can damage to the legs of the Governments of the day. This is also not clear, whether Principle NGO’s working with the sole object and purpose to enhance transparency in the governance, at all having been propagated or not against Banking Privacy Law of Switzerland? Since, the matter is severe in nature, and also grave concerns to Human Rights (proclaimed by UNO) of the masses from the several countries including India , as such we decided to raise this important issue with hope that His Excellency will certainly take immediate cognizance on it. We have tried our level best to convince Switzerland Government to remove such severe embargo, caused by its Banking Privacy Laws. This is ample clear that Swiss Government under its Constitutional obligations cannot remove such embargo, though aware that this embargo is causing severe damages to the Human Rights of the masses of different countries. In this respect my correspondence with Swiss Authority is referred at: http://milapchoraria.tripod.com/swiss


Any Government, up to some extent in consideration of security aspects, can justify banking privacy policy adopted for its own (origin) citizen. But Banking Privacy policy aimed just to secure illegal money of the clients from other countries cannot be justified at all, because such citizen are legally liable to disclose deposits in foreign Banks before authority of their own country. A severe case example of the kind of countries referred above is Switzerland . Their privacy laws (Article 47 of the Federal Law on Banks and Savings Banks) prevent Banks from disclosing the identity of their clients even if there are clear indicators that certain accounts have illegal or stolen money in them. The sums involved according to some estimates just from India alone are between US$400 billion to US$1000 billion!

Such Banking Privacy Law of Switzerland is International Criminal Activity and grand theft that hurting a billion people?

In the last 10 years or so, Swiss authorities have, in theory, passed new legislation and rules aimed at curbing the international laundering of funds although in practice, even the Swiss people admit that this is nothing but lip service to silence international uproar on this issue. A line from a major Swiss Bank's website:


"In theory, bank secrecy can be lifted for matters such as inheritance, divorce and debt and bankruptcy by order of a legal authority of Switzerland only. In practice, Swiss bank secrecy is very difficult to lift, for the plaintiff must first prove before the Swiss court, that the account exists in Switzerland , e.g. by producing a bank statement."

The Swiss people and their government do not seem to take a lesson even from the Holocaust in which Hitler and the Nazis accumulated looted wealth in Swiss banks during World War II. As Swiss Government itself admitting that in recent days illegal Money of heads of some States were also found in Swiss Banks.

Several Heads of States, Ministers, high-ranking government bureaucrats, unscrupulous businesses, terrorists, drug traffickers, smugglers and other unscrupulous people are depositing large sums of illegal money in Swiss Banks taking advantage of the "privacy" shield provided by the State of Switzerland. Most adversely affected are the developing nations including those from Africa and Asia, where disappearance of large amounts of money badly needed for development cause the poorest people to suffer even more, and for protection of their various Human Rights.

UN and world bodies, over the years, have passed numerous resolutions and international laws affirming people's fundamental rights in an effort to curb injustice by any State or Heads of Governments [see Appendix “A” for some such references]. Plundering of public funds to the point where billions of people's suffering increases and people die of starvation is unjustified by any human standards.

The problem needs to be addressed now.

Accounts in Swiss banks can be scrutinized only when Switzerland 's constitution that provides for privacy can be amended. In February 2005 Survey Polls were conducted throughout the Switzerland by the Swiss Banking Association, which shown that 78% of the people of Switzerland are against the lifting of banking privacy even whatever International pressure exerts, because banking and deposits are responsible for the majority of the country's Economical Strength, albeit a large fraction of this money is illicit.

Swiss Government itself admitting that:

“In terms of added value, employment and tax revenues, the financial sector is one of the pillars of the Swiss economy. While only 5,3% of the Swiss workforce is employed in the financial services, this sector contributes to 14% of Swiss GDP1. In the last 10 years, this share almost doubled, due primarily to the growth in the banking and the para-banking2 sectors. At the beginning of 2003, there were 356 banks operating, of which 209 were Swiss. Beside the global players UBS and Credit Suisse which account for approximately 60% of the Employment: approx. 200'000 people, i.e. 5,3% of the Swiss workforce, 3,3% in banks, 1,7% for insurance companies and 0,3% for other financial services intermediaries. Contribution to GDP: 11% for banks, 2,7% for insurance companies and 0,3% for other financial services companies.”

“This is the real specialty of Swiss-based banks which according to certain estimates, manage more than one fourth of all internationally-invested private wealth”, “Switzerland's banking system currently comprises 378 institutions with a combined balance sheet total of more than 2,300 billion Swiss francs. Our two biggest banks – UBS and Credit Suisse - are ranked among the ten largest in the world, and in the area of asset management, Swiss banks are the world's leaders”, “A traditional strength of the Swiss Financial Centre is asset management which created over half of the banks’ total added value. In this business domain Switzerland occupies a leading global position. Here it is competing with other important financial centres.” and “Swiss financial center: Foreign customers accounted for a share of approximately 57%. Of all assets held, 42.1% came from private clients and 47.5% from institutional investors. Commercial clients accounted for the remaining 10.4%. As a means of comparison, Swiss foreign assets (active) in 2001 amounted to CHF 2,200 billion with corresponding net assets of CHF 602 billion.”. The rest 43% is defined, but reportedly major part of it are from unclaimed Assets lying with Swiss banks or Government.

On February 18th, 2004 H.E. Mr. Eric Martin, Ambassador, Head of the Economic and Financial Affairs Division Swiss Federal Department of Foreign Affairs addressed at JCIF - Japan Center for International Finance Tokyo, Japan, in which he concluded his address:

"Against this backdrop, I would like to conclude by stating that the efforts aimed at promoting a broader exchange of information can not be separated from the fact that any easing of the observance of confidentiality in Switzerland would certainly be welcomed by various rival financial centers that may be happy to manage certain assets currently deposited in our country. In this context, where significant financial interests are involved and arguments of an ethical nature are raised, it should be pointed out that a number of OECD countries have offshore financial centers within their zones of influence, which have been gaining rapidly in importance over the past few years. Other countries benefit from legislation that in practice grants an even higher degree of confidentiality or discretion than Swiss legislation does."

This exhibits the growing nature of this menace not just in Switzerland but also outside.

Generally, in the eyes of law, a person willfully hiding a murderer or criminal is also criminally liable. This extension needs to be applied to sovereign nations as well. Switzerland knows fully well that huge amounts of illegal wealth are amongst the bank accounts it holds; yet, there is no effort to find and separate such accounts. Under the taxation laws of each country, without any immunity, each citizen is liable to disclose his liabilities and assets, including information relating to Bank Accounts. Therefore, without knowledge to authority of respective country, money deposited by the foreign Citizen in Swiss Banks is absolutely illegal money, thus should not be protected from the Swiss Banking Privacy Law.


Taking advantage of the severe constraints caused by Switzerland Constitution, which provides that without referendum such Law cannot be changed, people of the Switzerland are determined not to allow changes in such laws. Therefore, this problem of International magnitude will not be solved till some sort of stiff actions are taken by the United Nations Organisations, which should be directed towards its Member States that “they cannot maintain any financial or other relationship with Switzerland or any other country, having Banking Privacy for Foreign Citizen. Such directions should be imposed for a period, till these countries do not change their Banking Privacy Laws, to ensure disclosures of the following details before the authorities of respective countries:

a) Total amount of "unclaimed" money in Switzerland from each country;

b) Total amount of money deposited in Switzerland with names of individuals / organizations, address and country.

In consideration of the matter of international importance and very much concerned to Human Rights of the masses from the World, I am awaiting your prompt response,

Milap Choraria Editor: Suchna Ka Adhikar / RTI TIMES
National Convenor : Movement for Accountability to Public (MAP)
http://milapchoraria.tripod.com/msp http://rtitimes.net


  1. hi
    like the article,
    we just need to ban notes of 500 and 1000 and we can solve this black money problem upto 50%

    good blog


  2. Recently there have been some newspaper and on-line reports that Indian citizens are believed to have hoarded away funds totalling about US$1,410 billion (equivalent to roughly Rs.68 lac crore or one and a half times India’s Gross Domestic Product) in banks in Switzerland and in other safe havens abroad. There is no way of judging the veracity of such reports because of the all-pervasive veil of banking secrecy in those places, but recently the Indian government investigators have come across some documentary proofs of a Pune-based swindler owning a deposit of Us$8 billion (about Rs.39,000 crore) in his bank account in Switzerland. And by no means he is the biggest fish in our huge pond of corruption and criminality. The astounding sum of US$1,410 billion is, therefore, unable to astound, and could be very much within the realm of credibility. This is our money for which Indians have toiled for years but now it is out of our reach and is available only to the most corrupt, crooks and criminals, making those traitors to the nation and their families obscenely super-rich for generations to come.

    Traditionally, these secret bank accounts have been considered beyond the long reach of international law, the concerned banks taking a Cosa Nostra’s omerta-like oath of silence whenever there is a demand for disclosing the beneficial ownership or size of the funds involved. But happily now the situation seems to be changing. According to the US Dept. of Justice release of the 12th November 2008, a senior executive of a large Swiss bank has been indicted by the US authorities for providing, through his cross-border private banking service team, services to about 20,000 American clients who reportedly concealed assets of roughly US$20 billion from the Internal Revenue Service (IRS) in clear violation of US law. Since the IRS is now doggedly pursuing, even prosecuting, those helping rich Americans stash away assets abroad and avoid paying US taxes, I think it is only a matter of time that the US authorities would ultimately succeed in recovering these and other similarly hidden funds.

    This provides a bright ray of hope for India. If the Indian Government mounts a US-like, sustained pressure on Swiss banks and government, if need be with the US help now that we have a strategic alliance with it, the hitherto secret bank accounts can be pried open. After our victory over Switzerland, the other safe havens would not be able to last long. So in the next decade or so, if our government is successful in recovering even one third of the total amount, that would be US$470 billion, all our infrastructural needs would be comfortably met out of it. But unfortunately, for some unfathomable reasons of it own, our government seems to be content with complete inactivity in the matter. We in the civil society will perhaps have to shout from the housetops to make it listen to our words of reason and stir into action.

  3. Indian Government should give more pressure using join force such as USA, Japan, African countries and other developing countries.

    Mr. President(USA) , please increase more pressure towards Swiss bank and govts. at the earliest time. That helps alot across the globe.


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