What Napoleon has to do with offshore banking
The Panama Papers leak wouldn’t have been possible without the French Revolution
By Asher Kohn
People can hide anything in offshore banks — whether it’s an antique Bentley or actual, literal gold mines — if they have the right lawyer. The Panama Papers have made that clear, in reams of documents dating back to 1977.
Offshore banking is, of course, much older than that. The concept we know today, in which the wealthy and well-connected store their money away from prying eyes (and grasping hands), was important enough to lay the foundations for modern Switzerland. Rich Europeans were nervous about something scarier than divorce lawyers or taxation. They were terrified by Napoleon.
France’s royal family had used Swiss banks since the 1600s and Swiss mercenaries for even longer. The French revolutionaries — Napoleon among them — weren’t happy about that, but there wasn’t much they could do. Sure, they guillotined King Louis XVI and looted the Tuileries Palace. But even after his troops conquered Switzerland, Napoleon didn’t shake down the Swiss bankers. Instead, he became one of their clients. By 1805, the Corsican crowned himself emperor and was a depositor in a private bank.
Napoleon was defeated in 1814, and by the following year French royals were living again at the Tuileries and Louis XVIII had access to the crown’s Swiss accounts. At the Congress of Vienna, more than 700 miles away, the emissaries of Europe’s royal families met to achieve a balance of powers in Europe that would prevent any lone revolutionary from shattering the continent again. The negotiations went on even after Napoleon escaped from exile in Elba, and concluded just days before Napoleon lost his final battle at Waterloo.
One of the Vienna treaty’s stipulations was that Switzerland was to remain independent and neutral from 1815 onwards. The navel of Europe — a mix of German and French, Catholic and Protestant, farmers and merchants — was to be free of outside political influence. Switzerland was to be Europe’s lockbox.
The French crown, if not France, was able to recover soon after Napoleon was exiled for good. Royal families and powerful men realized that if the political winds ever stirred anger against them again, their valuables could be kept safe in Switzerland, protected by the Alps and lawyers. Swiss bankers were more than happy to promise security — at a premium.
So if something seems archaic and musty about offshore banking, it’s because the concept was created as a counterweight to Europe’s greatest revolutionary. If offshore banking was good enough to keep royals safe from Napoleon, it’ll certainly work for businesses trying to dodge taxes.
