18 Dec 2008

Director of Swiss Federal Office of Justice Michael Leupold: Switzerland is a wrong place for concealing or depositing illegal funds

Michael Leupold, a senior Swiss justice ministry official has spoken highly about mutual legal assistance between Russian and Switzerland in dealing with criminal cases, saying there had been only once instance - the Yukos case - where the Swiss Federal Tribunal denied such help to Russia.

Mutual assistance with their Russian counterparts has been increasingly significant for Swiss prosecution authorities in recent years, Leupold, director of the Federal Department for Justice of the Swiss Federal Department for Justice and Police (justice ministry), told Interfax.

Switzerland had received very valuable help from the Russian Office of the Prosecutor General in important trials, Leupold said.

Switzerland and Russia had been jointly fighting crime for a long time under Council of Europe conventions, he added.

Such cooperation is increasing all the time, the official said. Switzerland yearly receives an average of 50 requests for legal help, often on corruption or economic crime cases, he said.

On several occasions, Swiss courts have received suits from persons under prosecution disputing Russian-Swiss cooperation under criminal cases but most of the suits have been thrown out, Leupold said

Swiss authorities have confiscated several million Swiss francs belonging to businessman Boris Berezovsky at Russia‘s request.

"The Federal Criminal Court of Switzerland on October 27, 2008 ruled to confiscate several million francs from bank accounts in Switzerland, one of whose beneficiaries was or is Berezovsky. The Federal Criminal Court‘s ruling has not yet taken legal effect," Michael Leupold said.

The matter involves the so-called Aeroflot case, under which a Russian court trying Berezovsky in absentia found him guilty of embezzling nearly 215 million rubles belonging to Aeroflot and sentenced him to six years in prison at the end of last year.

In addition, Switzerland earlier passed documents on the Aeroflot case to Russian authorities, Leupold said.

"The Federal Criminal Court ruled on July 15, 2008 that the money frozen under mutual legal assistance procedures will remain blocked because of possible restitution request that Russia might make," he said.

"In the past, Switzerland provided Russia with documents on the investigations into various cases, and Switzerland also returned Russian money of criminal origin, which was blocked based on confiscation rulings passed by competent courts," Leupold said.

"However, these cases did not involve particularly famous people, and the sums were not astronomical, either," he said.

Leupold also told that Swiss banks had almost 32 billion Swiss francs (about $25.5 billion.) of Russian origin.

According to this country‘s National Bank, the holdings lodged with Swiss banks or their foreign branches by Russian residents and Russian-based businesses totaled 31.6 billion Swiss francs by the end of 2007, said Michael Leupold.

That includes 13.8 billion Swiss francs in bank assets, 42 million in savings and current accounts; and 17.5 billion other bank liabilities (call deposits and fixed-term deposits), Leupold said.

By the end of 2007 the liabilities [of Swiss banks] before foreign clients totaled 2.0704 trillion Swiss francs, he said.

Apart from few exceptions, property holdings managed in Switzerland are of legal origin, Leupold said. It is very rare for criminals manage to get around the anti-money laundering system (in particular, the system of thorough verification of the money origin by banks) and to deposit illegal money in Switzerland, he said.

For years Switzerland has been actively fighting against the illegal use of our financial institutions and is playing a notable role in international cooperation and restitution of criminal holdings, he said.

Some of the high-profile cases, such as Marcos case or the Abachi case [Philippine President Ferdinand Marcos and former Nigerian leader Sani Abachi], made it clear to criminals that they should not rely on the Swiss bank secrecy in order to escape justice. Switzerland is a wrong place for concealing or depositing illegal funds, the justice official said.