Could WTC Disaster Impact On The Future Of Banking Secrecy?

by Robert Lee, Tax-News.com, London

17 September 2001

In an article written by tax expert Professor David Hardesty last week examining the effect on banking secrecy after the shocking terrorist attacks on the World Trade Centre and the Pentagon, he asks the question, 'will countries like Switzerland and the Cayman Islands lose their coveted bank secrecy?'

Professor Hardesty discusses the recent controversial attempts by organisations such as the OECD and EU to pressure banks, particularly those operating in offshore financial centres, to relax their secrecy rules in an effort to uncover money laundering and tax evasion. 'There is little doubt terrorists and others use secret accounts to finance their operations. Perhaps the money to finance the WTC attack came from such an account,' wrote Professor Hardesty.

Indeed, the prime suspect behind the US attacks, Saudi millionaire Osama bin Laden, is believed to have financed numerous terrorist attacks since the 1970s. But any details of his finances and their location is a complete mystery to the authorities and it is likely that attempts to investigate the matter could have been thwarted by banking secrecy rules.

Professor Hardesty is by no means suggesting that governments should infringe on the legitimate affairs of the banks' clients: 'No one wants large countries, like the United States, to dictate banking policy to other countries,' he explains, but he does goes on to ponder: 'Is there a place in the world for a system of bank secrecy that gives criminals and terrorists a safe haven for their funds?'

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