Switzerland remains the most secretive financial centre worldwide. This has been shown in the Financial Secrecy Index of Tax Justice Network (TJN). Despite advances, Switzerland heads the ranking for the third consecutive year. The hidden number 1 is however Great Britain.
The country entertains a network of tax havens around the world, writes the TJN in the study published on Monday. On islands such as Bermuda or Jersey trusts and shell companies manage many trillions of dollars. If these areas were included, the UK would be guaranteed the top ranking.
Switzerland remains the "mother of all tax havens". It leads the so-called Financial Secrecy Index again after 2011 and 2013. The top ranking is mainly due to a high secrecy. Banking secrecy is "all but dead," the report claims.
Switzerland had to admit to "its iron secrecy" according to TJN. However, compared to other major financial centres such as Luxembourg, the country remains a "laggard." Switzerland will start approximately in 2018 to implement the global automatic exchange of information to the OECD. Switzerland is pursuing zebra strategy for doing so: White money from rich and powerful countries, black money from "vulnerable" developing countries. Accordingly, the Swiss banks have shifted their focus away from OECD countries and expanded its market share in developing countries, the TJN noted. It is not coincidental that the National Council refused new due diligence requirements for banks in September, writes Alliance Sud.
The TJN recognizes that the international community have made the first steps towards greater transparency in recent years to political pressure. But the global financial system itself remains "in many parts a transparency Desert".
The fact that the political pressure is only limited, is indicated by the leading positions of the Financial Secrecy Index. The first eight countries from 2013 are still in the leading positions this year, albeit in a different order. These include four OECD countries alongside Switzerland, USA, Luxembourg and Germany.
After Switzerland Hong Kong landed in second place. The control by China would allow the former British colony to largely shield itself from global transparency initiatives.
The USA fell from sixth to third place. The country is indeed a pioneer when it came to enforcing its own interests against foreign tax havens, criticizes the TJN. By contrast, the United States convey little information to other countries.
Singapore and the Cayman Islands follow in the fifth and sixth place, followed by Lebanon and Germany. The top ten is completed by Bahrain and Dubai. The index lists a total of 92 financial centres according to their degree of confidentiality in combination with their share of the global market for cross-border financial services. The ranking therefore shows, according to TJN, which nation states particularly attract illicit financial flows. The index has been compiled every two years since 2009.