In recent years Switzerland has been rocked by controversy over the role its banks and government played in World War II and the future of its much-vaunted banking secrecy laws. In August 1998 Swiss banks agreed to pay out US $1.25 billion to settle claims made by Jewish groups and individuals. In 2001, a report on Switzerland's behavior during the war revealed some disturbing truths that ran counter to the belief many Swiss citizens held that their government had maintained complete neutrality throughout the war. Most troubling were revelations concerning border closings to Jewish refugees and documents proving Swiss companies helped finance Germany's military, in defiance of Swiss law.
Switzerland's banking secrecy laws have long made it a haven for people wishing to hide their assets, for whatever reason. The government has long maintained that it had no power to intervene to determine the ownership or control of accounts. In the late 1990s this began to change as human rights groups and aggressive European magistrates looking into corruption and money laundering began demanding some kind of accounting. The government passed a law in 1998 opening formerly secret information to a certain extent. After the terrorist attacks on the United States in September 2001, the United States began pressuring Swiss banks to provide investigators with information to help track money transfers and accounts held by international terror organizations. Swiss authorities were quick to comply and have been diligently tracking all suspicious transfers. President Couchepin has reaffirmed his government's determination to prevent the use of its financial sector and banking laws to finance international terrorism. Banking reforms planned for 2003 includes measures designed to root out terrorist financing, a crack down on money laundering, and the imposition of withholding taxes on foreign accounts.