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Italian Money Flowing Into Switzerland: Concerns Much Illegal

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By Gerhard Lob

Italians are shifting money into Swiss banks, prompting fears that vast sums are crossing the border illegally and adding to the billions of euros already stashed away.

But financial experts say the funds are mostly assets that have been declared to the tax authorities in Italy and are not substantial.

According to Attilo Befera, head of the Italian Revenue Agency, huge amounts of capital are leaving the country amid uncertainty surrounding its financial wellbeing. In an interview with the “La Repubblica” newspaper, he said that the fight against tax evasion needed to be stepped up.

Last year, €11 billion (SFr13.25 billion) that was about to leave the country was seized by the financial police at Italy’s borders. Seizures of cash increased by around 50 per cent in 2011, while the figure for gold grew by at least 30 per cent.

There have been reports that old smugglers’ routes between Italy and Switzerland have been re-activated while rumours have been circulating that Swiss banks have been forced to rent safes in hotels to meet the unexpected demand from Italian clients.

Claims that Italians are smuggling massive amounts of assets out of the country are not new.

In December for example, La Repubblica reported that some smugglers were resorting to primitive methods such as hiding money in suitcases or under their clothes, as in the 1970s and 1980s.

Amount questioned

In canton Ticino, where most Italian funds have been deposited in the past, bankers play down this kind of report.

“There has been an influx of money, but not as much as people believe,” said economist and journalist Alfonso Tuor, who believes most of it is made up of small deposits.

Credit Suisse in Ticino declined to answer any questions about the alleged arrival of fresh Italian assets.

Alfredo Gysi, president of the board of the BSI bank based in Lugano, conceded in a newspaper interview in January that Italian funds were coming over the border, but there was nothing true about the numbers being mentioned.

BSI created a number of new accounts, and existing clients had only brought medium-sized amounts over the border to deposit.

Business lawyer and financial expert Paolo Bernasconi shares that impression, pointing out that Italians have been transferring officially declared assets from Italy to Switzerland for the past few months.

The risk that an Italian bank might go belly-up as the result of the country’s debt level and the financial crisis has led many people to spread their assets a little wider. Switzerland’s better outlook has convinced Italians to transfer their funds to Swiss banks.

“The influx of legal money shows that the Swiss government’s so-called ‘white money’ strategy is starting to pay dividends and that’s a positive signal,” Bernasconi told swissinfo.ch. Certainly, for the lawyer, more important than any smuggling going on.

More checks

For the banks operating in Ticino, there is no apparent interest in taking on undeclared assets from Italy. The Italian authorities have criticised Swiss financial institutions in the past, and Ticino banks in particular.

Italy has also tightened border controls to stop undeclared assets fleeing the country. One method has been to systematically photograph cars crossing into Switzerland.

There is €150 to €160 billion worth of undeclared Italian assets in Swiss banks, according to various estimates. The Italian authorities have tried to repatriate these funds with three fiscal amnesties in the past decade.

Those who came forward faced lower penalties and immunity from prosecution. The last amnesty in 2009 and 2010 even allowed taxpayers to keep their Swiss accounts so long as they officially declared their assets.

The Swiss Bankers Association has refused to comment on the latest developments in southern Switzerland. “We don’t have any numbers to go by,” said spokeswoman Rebeca Garcia.

The story of renting hotel safes has at least brought a smile to bankers’ faces. In Lugano, it is considered by many observers as simply part of a strategy to intimidate Italian clients.

(Adapted from German by Scott Capper)

SwissInfo

SwissInfo

swissinfo is an enterprise of the Swiss Broadcasting Corporation (SBC). Its role is to inform Swiss living abroad about events in their homeland and to raise awareness of Switzerland in other countries. swissinfo achieves this through its nine-language internet news and information platform.

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