Kathmandu, January 16
Nepalis have parked Rs 35.8 billion in Swiss banks, violating the country’s law, which bars Nepalis from transferring funds abroad, says a year-long investigation conducted by the Centre for Investigative Journalism in collaboration with the International Consortium of Investigative Journalists.
Nepali account-holders have earned interest of around Rs 774.1 million from the funds they deposited in Swiss banks, says the report, Nepal Leaks 2019: Illegal Wealth Watch, adding, Nepalis appear to have started parking their wealth in Swiss banks beginning 1996, when the Maoist insurgency began.
Nepalis deposited 11 million Swiss francs in Swiss banks in 1996, according to data released in 2017 by the Swiss National Bank. Over a period of 10 years, Nepalis had parked a whopping 240.3 million Swiss francs in Swiss accounts.
After the conflict was over, funds of Nepalis in Swiss accounts declined dramatically for two years, says the report. But after that savings in Swiss banks hit 460.8 million Swiss francs (approximately Rs 52 billion). “Even now, Nepalis have Rs 35.8 billion in the Swiss banks,” says the report. However, the number of account-holders is not known, as Swiss National Bank, the central bank of Switzerland, does not reveal those details.
The investigation also shows that some foreigners are found to have used Nepali documents to deposit money in Swiss banks. As per details provided by ICIJ, an Israeli national Liver Zohar Yehuda, 53, has used Nepali passport to park his money in a Swiss bank. The CIJ and ICIJ probe also shows that 55 Nepalis have invested in several foreign countries and nearly a dozen business groups are involved in channelling their illegal wealth abroad. These groups are also bringing the money back into the country in the name of foreign direct investment, adds the report.
The CIJ study explains with evidence how ill-gotten wealth is taken abroad, how it is returned to the country as foreign direct investment and people involved in the financial crime within Nepal and outside.
The CIJ team took nearly a year to sift through some 3,000 documents and interview nearly 70 individuals, including office staff, their helpers, relatives and stakeholders directly linked with the issue, to prepare the report.
Nepalis cannot transfer funds from Nepal or invest in a foreign country without permission from the government of Nepal. Non-Resident Nepalis are allowed to do this. “However, Nepali citizens and NRNs were found to have evaded Nepal’s taxes, invested money in countries where taxes are not strictly enforced, and repatriated the investment,” says the report.
A version of this article appears in print on January 17, 2019 of The Himalayan Times.