The Swiss Attorney General’s office has dropped a decade-long investigation into Russian money laundering, concluding that there is no evidence to bring charges “against anyone in Switzerland.”
But Bill Browder, the man who brought the case to the Swiss authorities’ attention in 2011, says that ending the probe without any charges was “a very dark stain on Switzerland.”
Switzerland, Browder argues, was one of the key destinations for laundering dirty Russian money between 2008 and 2010. Specifically, it was Russian tax authorities that channeled $230 million from Browder’s company, Hermitage Capital Management, to banks around the world, with Switzerland taking the lion’s share.
In response, the Office of the Attorney General seized CHF 18 million ($19.6 million) while it investigated a number of bank accounts and questioned unnamed Swiss individuals (Swiss law prohibits individuals from being named in court filings).
However, on Tuesday (27 July), after a 10-year investigation, the Office of the Attorney General said that all bar CHF 4 million ($4.3 million) of the seized funds would be released. It said that “a link had been established” between the CHF 4 million ($4.3 million) and the offence committed in Russia, although no individuals would be charged.
But Swiss prosecutors did find reason to question Browder. Hermitage Capital Management, through which Browder filed the case in Switzerland, was revoked as a complainant. “It had not been possible to demonstrate that the funds under investigation in Switzerland originated from an offence committed to Hermitage’s detriment,” the Attorney General’s office said. The decision leaves Hermitage unable to appeal.
“The collapse of the Swiss Magnitsky case come[s] amid accusations of bribery and political meddling at the highest levels of the Swiss Federal Prosecutor’s office,” Browder responded in a tweet.
Sergei Magnitsky was the name of Hermitage’s lawyer who died in 2009 after mistreatment in a Russian jail. Following his death, Browder campaigned for countries to adopt “Magnitsky legislation” which enables governments to sanction individuals who have committed human rights violations. The U.S. adopted the Magnitsky Accountability Act in 2012 and has since been followed by a number of other countries including the E.U. in December.
Browder’s case in Switzerland has been dubbed “the Magnitsky case,” even though prosecutors say that they are unable to use the “Magnitsky lists” and Switzerland, which is not part of the E.U., has never adopted Magnitsky legislation.
During the 10 year investigation of the Magnitsky case, however, evidence has emerged of a close relationship between certain Swiss and Russian Prosecutors.
In January 2018 a Swiss police officer alleged to have inappropriately co-operated with Russian officials in connection to the case was dismissed. Photos have since been leaked to Swiss media showing the former attorney general, Michael Lauber with Russian Deputy Prosecutor General, Saak Karapetyan, on a trip to Lake Baikal in Siberia.
Lauber stepped down as attorney general last year over a hushed meeting he held with Gianni Infantino, head of FIFA, the football body his office was investigating in a separate case.
Caught in the middle of this long-running investigation are the Swiss banks who today are set to hand back CHF 14 million ($15.3 million) in frozen assets to Russian individuals who have already been sanctioned by the U.S.
“The willingness of Swiss law enforcement to facilitate Russian corruption is shocking,” wrote Senator Roger Wicker in a letter to Mike Pompeo and William Barr in November. “The country has not prosecuted any of the individuals involved and plans to return the vast majority of stolen money to individuals sanctioned under the Magnitsky Act.”
This could tarnish the reputation of Swiss banks, which have spent years honing their image as prudent wealth managers. Switzerland the country, meanwhile, might start to lose its allure as a place to settle international conflicts.
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