SWITZERLAND, GERMANY, UNITED STATES: LOSING THE WAR ON TERRORIST FINANCING

Global Finance, Jan 2004 by Platt, Gordon

Party, or SVP, which won 27% of the vote in October's general election, making the party the largest in Parliament. Christoph Blocher, the SVP's leader, who is an outspoken proponent of bank secrecy, won a seat in December on the country's seven-member executive council, or cabinet.

In Germany, a court in Munich ruled in December that Rolf Breuer, chairman of Deutsche Bank's supervisory board, violated client confidentiality by commenting publicly in 2002 on the financial health of KirchMedia, which later collapsed. Bankers in many parts of Europe are obliged to keep any information about customer accounts strictly confidential.

While bank secrecy laws are frustrating efforts to track down criminals and terrorists, new banking regulations are being introduced worldwide to tighten the regulatory environment for corporates (see cover story, page 14).

In the US, meanwhile, the General Accounting Office, the investigative arm of Congress, says in a new report that the Treasury and Justice Departments have fallen nearly a year behind in developing a plan to fight money laundering and terrorist financing. The GAO cites turf wars between various government agencies and a lack of understanding about how terrorists raise and transfer their funds as reasons for the lack of action. -Gordon Platt