ISLAMABAD: Finance Minister Ishaq Dar staggered the National Assembly on Friday when he revealed that at least $200 billion of ‘Pakistani money’ was stashed away in Swiss banks.
In a written reply, Dar told the house that the government was engaging with Swiss authorities to get to the money, hidden away by various Pakistani nationals.
In a detailed response to a question raised by Dr Arif Alvi of the Pakistan Tehreek-i-Insaf (PTI), the minister quoted statements by a Swiss banker and a former Swiss government minister: “One of the directors of Credit Suisse AG stated on the record that $97 billion worth of Pakistani capital was deposited only in his bank. Similarly, Micheline Calmy-Rey, a former Swiss foreign minister, is reported to have put the amount of Pakistani money hidden in Switzerland at $200 billion — a statement that was never contradicted,” he revealed.
Saying that he believed the figures were correct, Mr Dar said the situation called for immediate corrective action. To put the enormity of this find into perspective, Pakistan’s total external debt stands at $150 billion and its gross domestic product is said to be around $300 billion. The country can, theoretically, pay off all its debt with the money in Swiss banks and still have nearly a quarter of it left over.
The finance minister said the government was working under the ambit of a new Swiss law, known as ‘The Restitution of Illicit Assets Act, 2010’ (RIAA), which allows the Swiss government to exchange information — which was considered confidential up to now — regarding money that may have been obtained illegally and deposited in Swiss banks. He also briefed the house on the steps the government was taking to get the money back.
The minister said the federal cabinet in a meeting on Sept 20 last year had already approved renegotiation of the current Pak-Swiss tax treaty and Federal Board of Revenue officials and the Swiss authorities concerned had agreed to meet in August this year to upgrade the existing agreement.
In his reply, Mr Dar also referred to various international pressures that had forced the Swiss government to review its policy on clandestine banking.
Amid a global squeeze on tax evasion, money laundering and blatant outflows of capital, Switzerland’s 11 largest banks housed nearly $7 trillion of the world’s total offshore liquidity stock of $32 trillion.
Switzerland has traditionally been the oldest, the most formidable and the most popular secret banking jurisdiction, attracting massive sums of tax-evaded money from across the world into its banks with numbered-accounts. Since 2009, the US and EU have consistently been pressing Switzerland and other tax havens to allow international tax administrations to track illegal funds parked in their secretive banks.