Numbered bank account
A numbered bank account is a type of bank account where the name of the account holder is kept secret, and they identify themselves to the bank by means of a code word known only by the account holder and a restricted number of bank employees, thus providing accountholders with a degree of bank privacy in their financial transactions. Numbered bank accounts are frequently associated in the public mind with a desire by the account holder to either minimize governmental scrutiny and taxation, perhaps to conceal an illegal or unethical origin of the money in the account or to avoid arbitrary government interference in the affairs of a political dissident. For this reason, numbered bank accounts are illegal in most banking jurisdictions, but are available (subject to heavy international regulations) in some Western European countries with a long tradition of specializing in international banking, such as Switzerland and Austria; the holder has to be fully identified but there is no law that enforces the bank to fix the name of the holder in the title of the account.
Modern numbered bank accounts are not fully "anonymous", but they do serve to provide the account holder with a greater degree of protection from scrutiny while minimizing the exposure of the account holder's name in public settings. For example, the Swiss banking system (in contrast to banks in other countries) will not reveal information about an account (whether "numbered" or not) to any governmental agency unless proof of deliberate fraud is established, not merely the non-reporting of assets in order to avoid taxation. However, bilateral treaties negotiated in 2009 between Switzerland and a number of countries may weaken this type of protection from scrutiny, as did a special agreement negotiated in 2009 between the United States and Switzerland concerning clients of the bank UBS SA.
In order to restrict the use of numbered accounts for money laundering and other forms of financial fraud, the Council of Europe mandated in 1980 that numbered bank accounts be subject to international and domestic regulations pertaining to the verification of the identities of account holders and their activities. Under these regulations, banks which operate numbered accounts may be required by a court order to reveal the owner's name and financial details, and the identity of the holder or beneficial owner must be examined for obvious fraudulent intentions at the start of the banking relationship. Since July 1, 2005, Switzerland (as the largest holder of European numbered bank accounts) has also charged a withholding tax on all interest earned in the personal Swiss accounts of European Union residents, a measure designed to satisfy EU tax requirements while still preserving account holder anonymity.
With the advent of cryptocurrencies such as Bitcoin, users store digital currency in numbered accounts. These accounts are not managed by any central authority and do not have any personal identification attached to them. However, it should be noted that in some instances an identity could be connected to these types of numbered accounts. For example: Bitcoin uses a public ledger called the blockchain to determine what accounts have ownership of currency. By tracing known transactions to and from the account an identity could be established. Also, if an account is controlled by an entity on behalf of a user for whom the entity has identity information (such as a currency exchange) that entity could reveal the ownership of the account.
- Identification rules for swiss banks[dead link]
- Switzerland: Bundesgesetz zur Bekämpfung der Geldwäscherei im Finanzsektor (Geldwäschereigesetz, GwG) (Money Laundering Act)
- Austria: Bundesgesetz über das Bankwesen (Bankwesengesetz –BWG) § 40ff (Federal Law on Banking)
- Switzerland: Agreement on the Swiss banks' code of conduct with regard to the exercise of due diligence (CDB 03)
- Austria: FMA, Austrian Financial Market Authority – Circular on Identification and Verification of Identity