Washing something means making it clean and usable, and that is why the term ‘Money Laundering’ came into being, because this is how black money or illegal money is made usable. Some people hide their earning so that they don’t have to pay taxes.
Bank secrecy is legal principle under which banks are not allowed to give customer’s personal and account information to authorities until and unless certain conditions apply. These laws prevail in most countries but in some they are very strong such as in Switzerland, Lebanon, Singapore, and Luxemburg. In 1934 a Banking Law was passed in Switzerland, after this law the Swiss banks were not bound to reveal a customer and account information to any authority in the world. It’s the result of this secrecy law that one-third of funds, which are held outside the home country, are deposited in Swiss banks.
Several large banks of the world collapsed due to their involvement in money laundering, as it is illegal and it poses serious damages to financial health of a country’s economy. In countries, where there are no checks and balances, such as third world and African countries, large amounts of illegally gained money is secretly transferred to the Swiss Banks. These banks provide complete protection to the money depositors.
Anyone who is not willing to pay tax on their earnings, deposits their earnings in Swiss banks, Pakistani politicians are very notorious for not paying taxes, because Swiss Banks are there to hide their ill-gotten gains. Currently billions of rupees of Pakistani politicians are in the Swiss banks and we recently had one PM fired for not writing to the Swiss authorities, asking to open the Presidents case, of large amount of money in his Swiss bank.
The Western authority’s charge third world banks, regarding their involvement in money laundering, but remain mum over the Swiss banks. It seems to be hypocritical when the kettle calls the pot black. Let’s make sure we know who the real culprits are in this large international money laundering game
BURHAN KHAN,
Lahore, May 26.