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Calls mount to investigate secret Swiss accounts

Opposition politicians and civil society activists are calling for a full investigation into secretive Swiss bank accounts worth more than US$ 85 million (Rs. 11.2 b) held by wealthy Sri Lankans and institutions. This follows the Sunday Times’ July 1 exclusive exposure of this issue.

 UNP Parliamentarian Lakshman Kiriella, who revealed in Parliament on Tuesday that some 400 prominent members of the government had such accounts, told the Sunday Times later that there were many more. “But there are also some legitimate (non-government) investors holding these accounts,” he said, declining to reveal the�source of his information.

“Why can’t the government (authorities) probe this,” he asked.The issue has been the focus of discussion at the high echelons of civil society with links to grassroots groups, saying a probe is a must and widely praising the Sunday Times for its efforts.

The Sunday Times on July 1 blew the lid on an issue that has eluded many governments over the past two to three decades on the number of Sri Lankans who have stashed ill-gotten money in Swiss banks whose secrecy clauses about the identity of account holders have encouraged millions of laundered money to be deposited.

Nihal Sri Ameresekere, Sri Lanka’s foremost anti-corruption buster whose efforts have been recognised by the United Nations, told the Sunday Times the amount disclosed (about 85 million US dollars or Swiss Francs in 2011. A Swiss franc is marginally higher than a dollar) is just the tip of the iceberg.

“There are many businessmen who operate accounts in different tax havens like Gibraltar (and the Cayman Islands) and probably transfer this money to Swiss accounts. When that happens, the deposits don’t come under the Sri Lanka country category,” he said.
 The Sunday Times report said that data of account holders and their country of origin were disclosed by the Swiss National Bank (Central Bank) for the year 2011 but no individual details were revealed in its publicly accessible website. The website details which was included in the Sunday Times report has led to many accessing it for more information, including those who have accounts, fearing they would be exposed, it is reliably understood.

“This matter is being discussed widely in many sections of civil society particularly since the large amount of deposits in 2005 was the time many large-scale projects began without any transparency or disclosure about amounts spent,” a top civil society activist, who declined to be named, said.

“Everyone wants to ascertain who has money in the secret accounts and it’s the government’s obligation to respond.” More than $180 million was recorded in 2005 belonging to Sri Lankan account holders, the highest amount in a single year for the 10 years (2002-2011) disclosed by the Swiss National Bank.

Mr. Kiriella said no tenders were called for the Hambantota port project for example and there have been several projects involving millions of rupees during this period. He said, during a discussion on Wednesday on increasing allowances to the Bribery Commissioners Department, he had asked why the Commissioners were silent on this issue.

“Why can’t they go to the Supreme Court and seek an order that can be executed overseas to ascertain the identity of those holding accounts? It is an obligation now on countries under the UN Convention of Anti-Corruption,” he told the Sunday Times.

Asked to comment, Central Bank Governor Ajith Nivard Cabraal, under whose purview the Financial Intelligence Unit (FIU) comes, said they would (only) get involved if banks reported suspicious (overseas) transactions. “And so far nothing (of that sort) has happened,” he said.
 But Mr. Ameresekere said that FIUs have been set up under the UN Convention and are pro-active in tracking terrorist funding and money laundering. “Sri Lanka was the second country to sign the convention in 2004,” he said. Under the Convention, an International Association of Anti-Corruption Authorities (IAACA) exists and under that law enforcement authorities like the Attorney General, Police or Bribery Commission can seek the assistance of countries to trace any laundered money.

“But the problem is that specific details must be given like the identity of these individuals otherwise it’s difficult to get this information,” Mr. Ameresekere, whose expertise has been often sought by the IAACA, said.He said the Convention has specific provisions relating to politicians, their families and close associates who are listed as ‘should be under the highest degree of scrutiny’.

But he said many individuals stash their money through complex corporate structures in different countries with trustees in charge and the actual owners hidden in the background. “These structures make it difficult to trace the origins of these accounts,” he noted.
By Feizal Samath


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