Political upheaval in the Arab world could see more capital moved to Swiss bank accounts as wealthy Arabs look to safeguard their assets, the CEO of Falcon Private Bank said.
“The unrest in the Arab world is a phenomenon that is being watched very closely. Business people in the area, who have accumulated wealth, are thinking of putting their wealth away in safe havens to diversify the political risks of their assets,” Eduardo Leemann, CEO of the Aabar Investments-owned private bank, said.
“Every crisis has its opportunities. I think more client assets are going to flow into Swiss private banks simply for the political stability of our system.”
Switzerland has long been an offshore tax haven for world leaders as it offers a degree of protection against investigations by foreign governments. However, Leemann said the country was considered a safe haven for Arab businessmen keen to protect their capital.
The region’s sixteen largest bourses have lost $140bn in the last five weeks as investors flee the market and political turmoil spreads.
“We’re not talking about corrupt money,” Leemann said “We’re not talking about the cases of the dictators in certain countries. I think whoever has accounts of those guys, has a problem. Whoever has accounts of corrupt people knows that and [they] have to address that issue.”
In recent weeks, the European state said it would freeze the assets of Libyan leader Muammar Gaddafi and those former Tunisian president Zine Al Abidine Ben Ali and his wife.
Switzerland’s Federal Police said last month that its money-laundering office had received about 30 reports of possible illicit assets deposited by Mr Ali or his entourage, valued at around $76m.
The world’s largest offshore banking sector has also frozen tens of millions in Swiss francs in assets belonging to members of the former Mubarak regime in Egypt, including family members.
Closer to home, economists have suggested that Dubai will see the biggest influx of investment should protests continue to grip neighbouring Gulf states Bahrain and Oman.
A high-profile Emirati businessman, who spoke on condition of anonymity, said the emirate was a more likely investment destination than Switzerland for funds, as the European state had alarmed Arab businessmen by freezing the accounts of those linked to the former regimes of Tunisia, Egypt and Libya.
“[The asset freeze] is unilateral,” he said. “It is guilty until proven innocent when it should be the other way around,” he said.
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