Dear Corruption Watch, I've been reading about the South Africans with Swiss bank accounts. Now that many of them have been named, what happens next?
Do the police, or people in the South African Revenue Service or other anti-corruption teams investigate them?
Zurich Wannabe
Dear Zurich Wannabe,
We can think of several agencies or institutions that ought to be taking a keen interest in the recent media revelations of South Africans with Swiss bank accounts.
Many hold sizeable deposits in them, and while not necessarily illegal – there are often perfectly sound and legal reasons for holding offshore accounts – the potential for money laundering is high.
Money laundering in broad terms means any activity that can make the proceeds of criminal conduct appear to have come from a legitimate source. In South Africa, money laundering is regulated by the Prevention of Organised Crime Act, the Financial Intelligence Centre Act and the Banks Act.
A person who is convicted of a money laundering offence is liable to a maximum fine of R100-million, or to imprisonment for a period of up to 30 years. This is one the highest fines our courts are statutorily empowered to impose, a sign of the seriousness with which our lawmakers regard the offence.
The Financial Intelligence Centre set up in terms of the legislation is tasked with identifying the proceeds of unlawful activities and the combating of money laundering.
Other objectives of the centre include disclosing information to investigating authorities, the intelligence services and SARS under defined circumstances, and exchanging information with similar bodies in other countries regarding money laundering.
Confidentiality not set in stone
The banker/client confidentiality entrenched in the Swiss banking system is the stuff of legend and is often talked about as a barrier to the effective combating of money laundering.
It can, however, be sidestepped if there is a substantial criminal allegation against a client, in which case a foreign governmental agency can gain access to bank account information; and in international mutual legal assistance proceedings.
Switzerland is required to assist the authorities of foreign states in criminal matters. Assets can be frozen and handed over to the foreign authorities concerned. In terms of the requirement of dual criminality, Swiss courts will not lift the requirement of banker/client confidentiality unless the act being investigated by the court is punishable under the law both in Switzerland and the country requesting the information.
Where South Africa requires international mutual assistance in administrative matters, the Swiss Federal Banking Commission plays a role. It may communicate banking information to the supervisory authorities in South Africa if certain statutory requirements are met.
Turning back to the recent revelations of South Africans with Swiss bank accounts, the institutions that should be interested in pursuing this information include the police, the Hawks, the Financial Intelligence Centre and SARS.
The money in an offshore account may have been acquired licitly, taxed and transferred licitly, but it may very well not have been.
As to whether any action has been taken by any one of these institutions in relation to these revelations, your guess is as good as ours.
• This article was first published in Sunday Times: Business Times
Do the police, or people in the South African Revenue Service or other anti-corruption teams investigate them?
