Bloomberg / Getty Images A sign sits on display outside the headquarters of the Swiss National Bank in Bern, Switzerland, on March 8, 2012

One of the most enduring myths associated with Swiss banks is the money of “unknown” origin that has been hidden in their coffers for generations. Because of a number of laws enacted in the past 15 years, Switzerland’s financial institutions are now tightly regulated, but at least one mystery still remains: who owns hundreds of millions of dollars’ worth of unclaimed assets languishing in the nation’s banks — and how long will they be kept there?

Earlier this month, Switzerland’s parliament set a 62-year deadline for the recovery of unclaimed assets, which are roughly estimated at anywhere from $100 million to $600 million. This means that the banks must keep inactive accounts for six decades after the last contact with the customer, and then turn the assets over to the Swiss government. The new time limit is longer than allowed in most other countries, which liquidate dormant accounts after five to 30 years. And while the deadline is part of larger reforms of the banking sector, it is born out of the scandal that erupted in the 1990s over the dormant World War II accounts stashed in Swiss banks by Jews fleeing Nazi persecution.

Because many of these clients perished at the hands of the Nazis, the details of their funds are not known. But an independent international commission established in 1996 to investigate the dormant assets identified at that time 53,886 wartime accounts probably belonging to European Jews.

The difficulties Holocaust survivors or their heirs experienced while trying to retrieve their assets sparked international outrage and prompted a 1995 class-action suit against Swiss banks filed by Jewish organizations representing 300,000 Holocaust families. Stories of some bankers stonewalling clients by demanding documents that had often been lost in the war, led to tensions between the U.S. and Switzerland, and even to threats of boycotts of Swiss companies and products.

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The class-action lawsuit culminated in 2000 with a global settlement of $1.25 billion, administered by a special tribunal. Many of the victims stepped forward after the Swiss authorities published lists of known dormant account holders in the 1990s and 2000s. A total of 100,00 claims were filed with the tribunal before the 2011 deadline, and nearly $1.3 billion has been awarded so far; about $60 million will still be distributed, even though the tribunal disbanded at the end of 2012.

Although the deadline for applications pertaining to this particular settlement has lapsed, the new 62-year time frame for retrieving other dormant accounts from Swiss banks “is a very positive development after years of procrastination and secrecy,” says Swiss historian Hans Ulrich Jost, a critic of Switzerland’s wartime banking.

While Switzerland is the country most associated with dormant wartime accounts, many other nations in Europe and beyond have been known to hoard Holocaust victims’ money as well as, in some cases, property stolen by the Nazis from Jewish homes. In fact, Israel’s Holocaust-Era Asset Restitution Taskforce, which has recently searched through New York State’s unclaimed-funds database, has so far discovered thousands of names of Holocaust victims and survivors. “We know people put money in Swiss banks; maybe they also put money in U.S. banks to protect it,” the task force’s director, Bobby Brown, told the Jewish Week newspaper last month.

In Switzerland, information about remaining accounts — which are deemed dormant if inactive for more than 10 years — is not released because of the country’s strict secrecy laws. But Sindy Schmiegel, a spokesperson for the Swiss Bankers Association (SBA), an umbrella group for the country’s financial institutions, says the clients include Swiss citizens as well as foreigners.

Schmiegel says each financial institution must make all possible attempts to restore contact with absentee clients, tracking them by “proportionate means,” such as searching telephone directories and following up on address changes. If clients are still missing despite the bank’s efforts to locate them, the account must be classified as “dormant” with the Central Claims Office of the Swiss Banking Ombudsman. An independent mediator, the ombudsman deals with specific bank-related issues, including tracing of dormant accounts at a customer’s request. He is also the only official allowed to consult the unclaimed-assets database.

With the new, extended deadline for the recovery of dormant accounts, the Swiss are hoping to put the darkest chapter of their history behind them. “Maintaining a reputation and trust is a never-ending task,” SBA’s Schmiegel says. “Swiss banks have taken every reasonable step to refund dormant assets to the entitled heirs, and they have established an effective and easy way to search for inactive accounts.”

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