Return of illegal assets
Posted on 1 years ago
Pakistan has been facing a big issue of money laundering for many years. Several corrupt Pakistani officials, politicians, bureaucrats, businessmen and drug mafia agents have their secret accounts in Switzerland.
The notorious characters have transferred huge amount of money from Pakistan to Zurich, Dubai, Johannesburg and several other important cities of the world. Illegally obtained money is shown as originated from a legitimate source. These unlawful deposits can be returned to Pakistan if worked efficiently.
Sincere efforts have not been made by the National Accountability Bureau (NAB), Federal Board of Revenue (FBR), Federal Investigating Agency (FIA) and Anti-Narcotics Force to bring this stolen money back in Pakistan.
Switzerland was notorious for allowing European and American citizens to deposit their illegal money in its banks. In 2009, Europe and the United States forced Switzerland to form new rules for the 21st century and assist other nations to overpower tax evasion. After international pressure it negotiated deals with its neighbouring countries and allowed them to have access to hidden money of their citizens in Switzerland. Nonetheless, it devised a strategy to keep its financial position strong.
In 2011, Switzerland froze assets held by the former Egyptian and Tunisian leaders and other important persons of their group in order to return the illicit assets by means of legal assistance and in cooperation with the countries concerned.
Moreover, Switzerland made reforms to deal with Politically Exposed Persons' black money. Swiss banks, notorious for adjusting illegal accounts for the last two centuries, are now offering assistance against criminal deposit holders. It is now possible to recover the looted money under Article 25(1) of the Avoidance of Double Taxation Treaty with Switzerland. Illicit assets of Politically Exposed Persons are now identified and sent back to their country of origin. Switzerland has up till now returned billions of dollars to their country of origin.
Though huge amount of money was recovered from Ferdinand Marcos of the Philippines and Carlos Salinas of Mexico, the whole process of recovery took several years to settle the issues. It is because of the international conventions and complex local laws.
The Swiss government passed a law "Return of Illicit Assets Act"(RIAA) that would assist Pakistan and several other countries to recover the billions of dollars shifted to this country by fraudulent individuals and companies. The basic purpose of this law is to return the enormous money to the countries looted by corrupt civil-military bureaucracy and greedy businessmen-cum-politicians. The Swiss banks are now unable to hide untaxed Swiss accounts. The new system has been established to assist the world against international financial crimes.
Indian citizens have huge illegal assets in Swiss banks. The Indian government is working zealously to get back hidden and ill-gotten wealth from the Swiss banks. It is already in touch with the Swiss authorities to get back more than $1.4 trillion. Pakistan can get billions of dollars back from Swiss banks if sincere efforts are made.
Switzerland is no more a safe haven for stolen asset holders. The authorities concerned also ensure that the returned assets should not flow back in the hands of Politically Exposed Persons.
The RIAA act has been devised for cases involving assets frozen in Switzerland. These illicit assets could not be returned to the country of origin in the past because of certain legal hindrances. Certain Politically Exposed Persons and corrupt heads of sovereign state claimed immunity. However, under the RIAA, there is a change in the laws and procedures. This change is helpful in solving the issue.
Switzerland is now bound to provide information to Pakistan about all those suspected deposits that are not declared to national tax or supposed to be deposited in Switzerland to avoid tax in Pakistan. They would come under the category of presumed tax fraud that involves the falsification of documents.
Switzerland now financially assists in the recovery of stolen assets. It supports the return of illicitly acquired assets to the countries of origin and compensates the victims. The process, however, is complicated. Moreover, the Swiss government has concluded that those assets officials could not prove legitimate would be confiscated by the Swiss State.
It is estimated that about 200 billion dollars have been transferred illegally from Pakistan to Swiss banks only. It is pertinent to mention that avaricious politicians, civil and military government employees, corrupt bureaucrats, dishonest businessmen, drug mafia agents and many more are involved in this illegal business.
It is, in fact, a network of money laundering mafia. A thorough research is required to find out the magnitude of the black money shifted to Swiss banks. Pakistan can get billions back from Swiss Banks.
The Million Dollar question is: how to get back stolen assets from Swiss Banks? With the assistance of Swiss government and banks, Pakistan can be in a position to recover its lost wealth and illicit assets in Switzerland and other nations of the world. First of all Pakistan will have to get rid of corrupt regime to fight its case properly.
Politically Exposed Persons are, in general, Heads of State and high public officials. They, in general, ‘enjoy' immunity and plunder the wealth of the nation. Unfortunately they enrich themselves through illegal means and resources. They are, in fact, big criminals who deprive the people of their capital and hinder the progress of their country. The new laws discourage the criminals to invest in the finance centre in Switzerland.
Swiss laws and procedures are effective to overpower the issue of money laundering and corruption of the Politically Exposed Persons.
The assets of the Politically Exposed Persons are frozen or blocked and then finally returned to the relevant country.
Switzerland, after making thorough inquiry, supplies the state that has submitted a request, with details of suspicious accounts. It can be taken as strong evidence in criminal cases or legal proceedings.
Pakistani tax authorities can be directed by the apex court to seek information under Avoidance of Double Taxation and Exchange of Tax Information with the Swiss government.
After 5 years' hard labour Nigeria succeeded to get back $700 million of its plundered wealth back from Switzerland. Similarly Philippines recovered $684 million plundered by Ferdinand Marcos. It may be interesting to note that litigation of Filipino authorities continued with the Swiss authorities for 18 years. Peru, a country in Latin America, recovered $180 million stolen money by its former spy chief Vladimiro Montesinos from several jurisdictions, including Switzerland.
In May 2007 an agreement was made among the US, Switzerland and Kazakhstan for the repatriation of $84 million denied for several years. Mexico fought for 12 years to get back the stolen money by its ruler Raul Salines. Similarly the governments of Mali and Argentina got back $2.5 million and $4.5 million respectively from Switzerland.
Switzerland has learnt a lot from experience and litigation. Pakistan should learn a lot from the past events. In the present circumstances judiciary can force the government to follow the way to get back stolen money. In money laundering cases the Swiss government assists the relevant country and informs it about the credibility of the funds held in Switzerland.
It is time to ask information from Swiss authorities about the Pakistani black money deposited in Swiss banks and swift action should be taken to grasp assets from the Swiss banks.
The government of Pakistan needs to introduce asset-seizure legislation to get back huge amount of untaxed black money. The question is: who will bell the cat? Asif Ali Zardari and many other high-ups are involved in money laundering. It is believed that they have huge amount of black money in Swiss banks. All the black money of corrupt Pakistanis, in Swiss banks, should be confiscated after introducing asset-seizure legislation.
It is pertinent to mention that, in the past, Swiss banks have been publicly accused of accepting money from Politically Exposed Persons including Sani Abacha, Ferdinand Marcos, Benazir Bhutto & Asif Ali Zardai, Mobutu Sese Seko and Mohamed Suharto.
Banking is trillion dollars industry in Switzerland. Cracks now can be seen into the rock-solid reputation of the Swiss wealth management.
A huge sum of black money, originated from European countries, is transferred to Switzerland to escape high income taxes. The major sources of this money are Germany and Italy. Now Italy has given amnesty. That resulted in return of 100 billion euros back in the country. The German government is not prepared to give any concession to tax cheats.
Corrupt persons from Asia, Latin America, Russia and Eastern Europe still have great attraction for Switzerland as a wealth deposit management centre.
It may be interesting to note that tax evaders, in Pakistan, deprive the country of annual revenue that may exceed billion of rupees. The most painful thing is that these corrupt elements are most welcomed in government.
It is estimated that the annual national tax loss for fiscal year 2009-2010 was more than Rs500 billion. It is difficult to determine precise amount of revenue loss or amount of black money shifted abroad. Nonetheless, it is estimated that billions of dollars black money is transferred to Swiss banks annually. Tax Administration Reforms Programmes are the need of the hour.
According to the World Bank's Stolen Asset Recovery initiative estimates, corruption and tax evasion has reached between $ 1 trillion and $ 1.6 trillion per year. Almost half of this corruption and tax evasion occurs in under developed countries and weak and transitional economies.
The Swiss authorities have confiscated, frozen and blocked several suspicious assets in Swiss banks including assets of Egypt's former president Mubarak and Tunisia's former president Ben Ali. Suspicious deposits are reported to the Money Laundering Reporting Office and accounts of the suspicious persons are blocked without any hesitation.
Loss of credibility, lack of justice, accumulation of black money, distortions in resource allocations and loss of foreign and local investment are the chief issues associated with the present regime.
This horrible situation terrifies the honest citizens.
The people of Pakistan should have a political will to fight against the corrupt politicians and administrators. It would certainly strengthen the weak political system.
It's high time the nation took money and property arising out of corruption, tax evasion, narco-arms-trade and other unlawful activities. The courts should show zero tolerance in money laundering cases. Quick action against the corrupt characters is the need of the hour. Otherwise our future generations would never forgive us for tolerating corruption in the society.
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