Bad News Regarding Swift System From Swiss Banking Authority

What is SWIFT - SWIFT stands for "Society for Worldwide Interbank Financial Telecommunications". It is a cooperative of banks, brokers and financial institutions headquartered in Belgium. Swift does not send money; it just sends messages regarding monetary transactions. If you send a wire from a USA financial institution to another USA financial Institution the system used is the ABA system not SWIFT. If you send a funds transfer from one EU country to another, the system often used is IBAN. When you go to different countries with the exception of the IBAN countries then SWIFT is used.

There are 43 nations in Europe using IBAN plus Israel, Saudi Arabia, Mauritius and Tunisia. IBAN transfers take 24 hours. IBAN is not secure, private or offering secrecy. Many of the non-private countries use it so forget any thoughts of more privacy. It is setup for speed and for the EU countries to monitor payments for their VAT and other taxes.

Where is the SWIFT Data - Well it is kept in three places, Netherlands, USA and Switzerland.

Bad News - The Swiss said that the data stored in other countries (USA) is not under Swiss banking laws even though it concerns Swiss banking transactions. The USA has been monitoring SWIFT transactions by obtaining the data from the SWIFT office in the USA. This data is going to be stored in the USA until the year 2012.

Implications - This data seems to be likely applied in making claims for release of data on specific bank accounts as the new tax treaties go into effect around the world. The OECD lists no country as uncooperative anymore. We suggest closure of bank accounts you sign on corporate, foundation or personal before any tax treaties are signed in the nation you are banking in. If this is done after the tax treaty is in effect then all the bank records going back to day one can be requested. If the bank account is closed before the treaty enactment date then the bank records should not be affected by the new treaties. The treaties will not be retroactive. Then the answer would be trust account banking where the law firm is the signatory on the bank account not you.

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Aurelia Masterson is an associate of Panama Legal law firm (http://www.panamalaw.org). She has years of experience in the field and now shares her observations of current events, politics, and law with the Internet community. She can be contacted at: aurelia@panamalaw.org.