The Swiss government is beefing up contact with its banks to hammer home the message that harboring Saddam Hussein's loot would spell disaster for their reputations and the country as a financial center.
"We've renewed contact recently, drawing attention to members of the Iraqi establishment," Jacques de Watteville, head of the financial and economic affairs division at the Swiss Foreign Ministry, said yesterday.
But he denied the ministry was bolstering its links because it feared the Iraqi president had stashed some of his fortune, estimated at between US$2 billion and US$24 billion, in Swiss banks.
"We have no more suspicion that there are problematic issues here than there are in other important financial centres. This is part of an ongoing policy of prevention to enhance the efficiency of our fight against money laundering," he said.
"In this case, we are talking about Iraq, but we have the same kind of dialogue on other countries and in other cases.
"We were already in contact with the banking sector, even last year, to draw their attention to the necessary due diligence and their different obligations under Swiss banking legislation," he added.
Switzerland is often eyed with suspicion because of its strict bank secrecy rules, which critics say make it easy for tax cheats, criminals and dictators to squirrel away their ill-gotten gains.
The financial haven, home to a third of the world's offshore wealth, has in recent years frozen assets embezzled by the late Nigerian strongman Sani Abacha, Zairean leader Mobutu Sese Seko and Ferdinand Marcos of the Phillippines.
But Swiss officials insist tough "know your customer" rules, anti-money laundering legislation and guidelines on dealing with politically exposed persons (PEPs), weed out unsavoury characters and allow illicit funds to be frozen quickly.
De Watteville said the aim of the contact was to reinforce banks' obligations to carry out due diligence and report and block accounts if there is a suspicion they contain illicit assets, as well as reminding them to exercise extra care when dealing with the politically exposed.
"Iraqi PEPs include not only Saddam Hussein but other people around him. We're not saying that they have assets of illegal or legal origin, we're simply stressing that the banks have to be very careful with politically exposed persons under our legislation and implement it very thoroughly," he said.
Two weeks ago, the US asked all countries, including Switzerland, to freeze any Iraqi government assets as well as any ill-gotten gains of Saddam Hussein and his regime.
While Switzerland is yet to respond formally, it believes its existing anti-money laundering legislation and the implementation of the 1990 UN resolutions will have already led to the freezing of any illicit Iraqi funds held in its banks.
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