Numbered bank accounts are bank accounts where the identity of the holder is replaced with a multi-digit number known only to the client and select private bankers. Although these accounts do add another layer of banking secrecy, they are not completely anonymous as the name of the client is still recorded by the bank and subject to limited, warranted disclosure.
During the 1910s, bankers from Switzerland created numbered bank accounts to add a layer of anonymity for European clients seeking to avoid paying World War I taxes. With the passage of the Swiss Banking Law of 1932, the practice proliferated across the banking industry in Switzerland. Some Swiss banks supplement the number with a code name such as “Cardinal”, “Octopussy”or “Cello” that identifies the client, alternatively. However, to open this type of account in Switzerland, clients must pass a multi-stage clearance procedure and prove to the bank the lawful origins of their assets. Banking institutions that have adopted this practice in Europe, Asia, and the Americas also require clients to undergo stringent vetting and provide the identity of the beneficial owner. The usage of fake names to open these accounts is prohibited in Switzerland, the European Union, the United States, and other off-shore financial centers.
Many sovereign state governments have outlawed the usage of these accounts as they commonly associated with a desire by the account holder to either minimize governmental scrutiny or avoid taxation. Most regulations governing the usage of numbered bank accounts require that the holder signs a document and undergoes a background check that confirms who they are and a connection to the account. Despite the regulations, numbered bank accounts by their very nature are more private than normal bank accounts. In Switzerland, for example, bankers are outlawed from disclosing whether or not an account is numbered to any governmental agency unless proof of deliberate fraud is established, not merely the non-reporting of assets in order to avoid taxation.
- ^ Jump up to:ab “Fancy yourself a numbered Swiss Bank account? Here’s how you can get one”. The Economic Times. October 30, 2013. Retrieved May 18, 2018.
- ^Obringer, Lee Ann (June 8, 2011). “How Swiss Bank Accounts Work”. HowStuffWorks. Retrieved May 18, 2018.
- ^Schütz, Dirk (2000). The Fall of UBS: The Forces that Brought Down Switzerland’s Biggest Bank. Pyramid Media Group. ISBN 9780944188200.
- ^ Jump up to:ab “Swiss-Privacy.com | Numbered bank account”. www.swiss-privacy.com. Retrieved May 18, 2018.
- ^Enrich, David (January 6, 2018). “A Swiss Banker Helped Americans Dodge Taxes. Was It a Crime?”. The New York Times. Retrieved May 20, 2018. Several hunkered down in Switzerland, which refused to extradite its citizens to the United States for actions that weren’t illegal in Switzerland. None had actually gone on trial.
- ^ Jump up to:ab Browning, Lynnley (August 19, 2009). “Under Agreement, UBS to Give Up 4,450 Names”. The New York Times. Retrieved May 15, 2018.
- ^“Numbered Bank Accounts – Series 10 | Investopedia”. Investopedia. November 12, 2014. Retrieved May 18, 2018. A broker dealer, at the request of the customer, may open an account that is simply identified by a number or a symbol, as long as there is a statement signed by the customer attesting to the ownership of the account.
- ^ Jump up to:ab c d Koba, Mark (August 20, 2008). “How To Open A Swiss Bank Account”. CNBC. Retrieved May 12, 2018.
- ^“Offshore Manual: Swiss Numbered Bank Account”. www.offshore-manual.com. Retrieved May 18, 2018.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.