Monday 18 January 2016 As politicians and business leaders prepare to gather in Davos next week (20-23 January) for the World Economic Forum, Christian Aid questions whether Switzerland’s role as a haven for “dirty” money from poor countries makes it an appropriate host country.
Its role in helping the wealthy and powerful evade hundreds of millions of pounds of tax was exposed last year in the SwissLeaks scandal, when details of the HSBC Swiss bank accounts of 106,000 clients across 203 countries were leaked to the media.
“The WEF claims it is ‘committed to improving the state of the world’,” said Joseph Stead, Christian Aid’s Senior Adviser on Economic Justice. “That means taking a serious approach to financial probity.
“With so many of the most powerful politicians and businessmen in one place, they could make the Swiss agree to clean up their act,” added Mr Stead. “Otherwise the question remains – why continue to hold such a prestigious conference in a country that effectively encourages crime?”
A new Oxfam report cites estimates that worldwide, rich individuals have placed a total of $7.6tn in offshore accounts. It also states that as much as 30% of all African financial wealth is thought to be held offshore.
SwissLeaks meanwhile showed that secret bank accounts in Switzerland itself were being used to drain poor countries of staggering sums of money, much of it illegally through tax evasion and corruption.
“The outrage prompted by SwissLeaks forced Switzerland to agree to tell fellow rich countries about their citizens’ Swiss accounts,” said Mr Stead. “But it has done no such thing for poor countries, where people are dying for want of basic public services.”
Developing countries were hardest hit by HSBC’s Swiss bank, relative to the size of their economies, according to Swissleaksreviewed.org - an analysis of the data by Christian Aid and the Financial Transparency Coalition.
Mr Stead added: “While people from developing countries had smaller absolute amounts in HSBC Switzerland accounts, their countries lost more than rich ones, relative to the size of their economies. This is cash they can’t afford to lose.”
As an example, Sierra Leone spent 2015 struggling to cope with an Ebola outbreak, a challenge which was compounded by lack of funding for the health service. Its taxpayers had almost twice as much cash in HSBC Switzerland as did French taxpayers, relative to their countries’ GDP (Gross Domestic Product). Kenya had more than a fifth more in HSBC Switzerland than the UK, while the Democratic Republic of Congo had nearly five times as much as Germany.
“Our analysis of the SwissLeaks data shows developing countries urgently need information about their taxpayers’ assets held in Swiss banks,” said Joseph Stead. “This would enable their tax authorities to catch up with tax evaders.
“Yet most developing countries look unlikely to get any information at all. The Swiss government has said it will only agree to share information with countries where it faces a political and economic necessity to do so. It’s easy to see that developing countries will not pass that test – they simply aren’t powerful enough.”