Daily Management Review

Swiss banks to sort out dormant bank accounts


Recently, Swiss banks decided to "clean up" their assets. They launched a website with information on currently existing "dormant accounts", which keep at least 52 million ownerless Swiss francs in total. Now, owners of these accounts or their heirs have five years to claim their rights to these assets, otherwise the money will be transferred to the Swiss federal budget.

The category of dormant bank accounts implies any accounts which owner was last contacted at least 60 years ago, and which contains at least 500 Swiss francs.

André Naef, one of founders of FAST Search, which, on behalf of banks, is looking for the dormant accounts’ owners, believes that some banks are improperly fulfilling their obligations. The former top manager of a private bank, today he helps the banking structures to put things in order, and to find assets of his private clients in Switzerland.

Naef believes that those four thousand accounts that remained inactive for at least 60 years are only the tip of the iceberg. Banks are not in a hurry to reveal how much they have on these accounts. HOWEVER, estimations of authoritative Swiss Banking Association (Schweizerische Bankiervereinigung), around 2,250 Swiss francs are now located at approximately 2,900 accounts.

Since January 1, 2017 Switzerland works under the new OECD standards in the sphere of information exchange on financial accounts. Thus, Switzerland launched the process of implementing international standards in the field of taxation. Exchange of tax information with other states will be carried out on the basis of agreements regulating the mutual provision of legal assistance in criminal cases opened in connection with possible evasion from payment of taxes.

In this case, we are talking about the bank accounts and movements. The first tranche of the exchange will be made in 2018, but information on the Swiss accounts is already being collected. In this situation, a large number of "ownerless" bank accounts can become a serious problem for banks, as, according to André Naef, "the assets in these accounts can represent serious reputational risks for banks", and, in any case, "they can result in very unpleasant requests from foreign countries. It's strange that financial institutions are approaching this problem so lightly". 

For its part, the Swiss Banking Association stated that the online list of inactive accounts was created without any reference to issues related to tax evasion. "Banks of any country may lose contact with a client", said a representative of this organization. 

Fragmentary information on many dormant accounts makes the task of finding their owners and/or heirs virtually irresolvable. In some cases, the bank does not even know the client's name, let alone the date of birth, citizenship, place of residence or account number.

source: swissinfo.ch

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