Swiss Banking Secrecy

Since the early 1930s, Swiss banks had prided themselves on their system of banking secrecy and numbered accounts. Over the years, they had successfully withstood every challenge to this system by their own government who, in turn, had been frequently urged by foreign governments to reveal information about the financial affairs of certain account holders. The result of this policy of secrecy was that a kind of mystique had grown up around Swiss banking. There was a widely-held belief that Switzerland was irresistible to wealthy foreigners, mainly because of its numbered accounts and bankers’ reluctance to ask awkward questions of depositors. Contributing to the mystique was the view, carefully propagated by the banks themselves that if this secrecy was ever given up, foreigners would fall over themselves in the rush to withdraw money, and the Swiss banking system would virtually collapse overnight.

To many, therefore, it came like a bolt out of the blue, when, in the summer of 1977, the Swiss banks announced they had signed a five-year pact with the Swiss National Bank (the Central Bank). The aim of this agreement was to prevent improper use of the country’s bank secrecy laws, and its effect was to curb severely the system of secrecy. A headline in a British newspaper at that time aptly summed up the general view: Numbered accounts’ days are numbered.

The new code which the banks had agreed to observe made the opening of numbered accounts subject to much closer scrutiny than before. The banks would be required, if necessary, to identify the origin of foreign funds going into numbered and other accounts. The idea was to stop such accounts being used for dubious purposes. Also, the banks agreed not to facilitate in any way capital transfers from countries which had introduced laws to restrict the transfer of capital abroad. Finally, they agreed not knowingly to accept funds resulting from tax evasion or from crime.

Unfortunately, some banks began to abuse the protection afforded by this law. Critics, both inside and outside the country, frequently accused them of irregular practices. Some said the banks were havens for smuggled currency and that they provided a shield for tax evasion. A socialist Member of Parliament claimed that banking secrecy had helped Switzerland to become a nation of receivers of stolen goods. It was also believed that ransom money from a number of kidnappings in Italy was paid into Swiss banks in the southern Swiss canton of Ticino, located near the Swiss/Italian border.

The scandal came to light when the Credit Suisse bank revealed that the manager of one of its major branches in Chiasso, near the Italian border, had been involved in secret, unauthorized deals. These had resulted in gigantic losses to the bank. Some estimated the eventual figure might reach 300 million pounds sterling or more.

An important result of the Credit Suisse fiasco was that the Swiss banks were forced to tighten their rules and formalize their behaviour regarding banking secrecy. The Swiss Director General of the National Bank stated publicly that Switzerland’s status as a banking centre was based not on numbered accounts, but on the social and economic stability of the country.

Задание 27. Переведите деловое письмо с русского языка на английский язык:

LETTER 9

Уважаемые господа!

Мы получили Ваше письмо от 3 марта с.г., в котором Вы просите изменить условия страхования оборудования, предложенные нами в проекте контракта на поставку оборудования для машиностроительного завода. Вы хотите, чтобы контракт предусматривал страхование поставляемого оборудования от … рисков.

Мы обращаем Ваше внимание на тот факт, что Ингосстрах не производит страхование от … рисков товаров, поставляемых в …. порты. Нам известно, что страхование от ….рисков может быть осуществлено в Лондонском страховом обществе.

Что касается страхования оборудования от других рисков, то убытки возмещаются в зависимости от условий, на основании которых был заключен договор страхования.

Мы готовы еще раз обсудить условия страхования.

С уважением, ………..

Задание 28. Прочитайте и переведите текст по специальности со словарем:

It is becoming more popular for exporters to accept payment for their orders in the currency used by their overseas buyers. There are several reasons for this. Some goods are traded internationally in one particular currency e.g. oil sales in dollars. A buyer may traditionally prefer to price a contract in a particular currency. Buyers are aware of the fluctuating nature of rates of exchange for major trading currencies and may prescribe contracts priced in a currency that they expect to depreciate before final payment. By quoting in this currency, an exporter may be able to gain an advantage over competitors unwilling to do likewise. If an exporter uses credit finance, the cost of borrowing may be cheaper in a foreign currency than in sterling. However, an exporter must consider carefully the consequences of any invoicing contract in a buyer’s currency. Payment of a foreign currency leaves an exporter open to an exchange risk: an exporter may not receive full domestic currency value for an order if a buyer’s currency has depreciated during the contract period. It is unwise to accept payment in a currency that is not freely convertible on the foreign exchange market. The exporter may end up with blocked accounts or with funds saleable only at a considerable discount.

An exporter can protect against any loss caused by fluctuating currencies during the sales contract period by taking out a forward exchange contract with a UK bank. The exporter, invoicing a buyer in a foreign currency for payment at an agreed future date, sells those expected receipts to a bank in advance of the due date of payment. The bank agrees to buy at a pre-determined forward rate of exchange which varies according to the time of future delivery. No money is exchanged at the time the forward contract is made, but under its terms the exporter is guaranteed a certain amount of domestic currency in place of the foreign currency sales proceeds, whatever fluctuations in the exchange-rate may take place between invoicing and payment by the buyer.

Задание 29. Прочитайте специальный текст и перескажите его содержание на английском языке:

Who uses the records?

Certain external parties, from time to time, need financial information about the company.

There are legal needs which businesses must satisfy. Every year the accounts of limited companies have to be checked by independent auditors. In addition, companies must send a copy of their final accounts to the Registrar of Companies/ All businesses must declare their annual income to the Inland Revenue at the end of the trading year, so that their tax position can be assessed.

Some groups might be interested in the performance and stability of the business.

 Bankers. If a firm is trying to obtain a loan or has already received a loan, bank managers will insist on access to records. This will allow them to assess whether the company can repay the loan.

 Suppliers. If a business intends to order large quantities of materials or components on credit, the supplier might wish to assess its creditworthiness.

 Competitors. It is usual for businesses to make comparisons with their rivals using financial information. Also, if a company is thinking about an aggressive takeover it can use the information to help make a decision.

 Local community. From time to time the local community might show an interest in the stability of a company, to assess employment prospects perhaps.

 Media. Newspapers and television companies often make use of financial information when reporting.

 Future investors. Companies, financial institutions and private investors may require information when deciding where to invest their funds. Venture capitalists provide sources of funds for a business. They invest in up-and-coming businesses which they feel will do well in future.

Finally, the government may have an interest in a company’s financial information. It employs personnel to compile statistics on output, income and employment in the economy. Much of this data is published in journals and is available to the public in libraries.