Numbered bank account
Normally, a bank account is a financial account maintained by a financial institution for and in the name of a customer. The laws of most jurisdictions require the identity of the beneficial owner of an account to be included in the title of an account, and the use of fake names are outlawed. A numbered bank account, on the other hand, is a bank account where the identity of the account holder is not disclosed in the title of an account, and identification to effect transactions takes place using a code word or number known only by the account holder and a restricted number of bank employees, thus providing the account holder with a degree of bank privacy in their financial transactions. Numbered bank accounts are available (subject to international regulations) in some Western European countries with a long tradition of specializing in international banking using such practices, such as Switzerland and Austria. Even in those jurisdictions the account holder has to be fully identified to utilize some security features in their bank account, but there is no law that requires the bank to use the name of the holder in the title of an account.
Numbered bank accounts are illegal in most jurisdictions, because they commonly associated 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.
Modern numbered bank accounts are not fully "anonymous", but they do serve to provide the account holder with some 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.
In order to restrict the use of numbered accounts for money laundering and 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.
Bilateral treaties negotiated in 2009 between Switzerland and a number of countries may weaken the protection from scrutiny, as did a special agreement negotiated in 2009 between the United States and Switzerland concerning the clients of the UBS AG.
- Identification rules for swiss banks
- 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
- Accord entre la Confédération suisse et les Etats-Unis d'Amérique concernant la demande de renseignements de l'Internal Revenue Service des Etats-Unis d'Amérique relative à la société de droit suisse UBS SA (Accord between the Swiss Confederation and the United States of America concerning the demand for information by the Internal Revenue Service of the United States of America relative to the Swiss Society of Rights), Concluded 19 August 2009.