Safe-deposit boxes prone to money-laundering risks: Swiss government
There is also suspicion that illicit assets are being moved to safe-deposit boxes.
Geneva: Safe-deposit boxes used in Switzerland are prone to risk of money laundering and terror financing activities, but existing regulations are sufficient to deal with such risks, says a Swiss government report.
Prepared by the Swiss Federal Department of Finance, the report said that although "potential risk of abuse does exist for certain categories of safe-deposit box, there is little evidence of actual abuse and thus of a real danger".
In the wake of the global crackdown on the black money menace, the Swiss banking system—famed for its secrecy practices—has come under pressure, including from India.
There is also suspicion that illicit assets are being moved to safe-deposit boxes. After taking into account various types of safe-deposit boxes in Switzerland, applicable legal provisions and analysing the relevant risks, the report has concluded that "the regulation already in place is sufficient".
"Secure safe-deposit boxes that ensure an unlimited storage period for assets or valuables are exposed to a risk of abuse. "Bank safe-deposit boxes, highly secure safe-deposit boxes outside of the banking sector and secure self-storage units and warehouses, in particular, meet these criteria," the Federal Department of Finance (FDF) today said in a statement.
The report is about safe-deposit boxes and their risks of abuse for money laundering and terrorist financing. While noting that it believes that the existing regulation is sufficient with regard to the principle of proportionality, FDF said it will nevertheless monitor developments and review additional measures, if necessary.
"The prosecution authorities' comprehensive access to all categories of safe-deposit box is ensured within the framework of criminal prosecution. An accumulation of incidents was not observed," it noted.
According to FDF, extending the term 'financial intermediation' to the purely physical storage of assets will be complex and is expected to be associated with high costs. Besides, it's important to note that the existing regulation is in line with the international standards, the statement read.
Meanwhile, India and Switzerland have been working closely on mutual administrative assistance on tax matters.
In recent months, Switzerland has disclosed names of over a dozen Indians about whom information has been sought by the Indian government amid suspicion that their accounts in Swiss banks were used for stashing illicit money.