The Swiss-based Bruno Manser Fund and two Malaysian NGOs have handed over a petition to the Swiss government urging it to return CHF104 million ($110 million) of illicit profits to Malaysia which is linked to the 1MDB state-run investment fund corruption scandal.
The NGOs criticise the fact that Switzerland currently has no legal basis to return the looted money to the Malaysian people. They condemn statements made by Finance Minister Ueli Maurer that the money confiscated by Switzerland from the corruption case should therefore be paid into a Swiss federal fund. The 1Malaysia Development Berhad (1MDB) sovereign fund is the focus of money-laundering investigations in at least six countries, including Switzerland and the United States.
According to Lukas Straumann of the Bruno Manser Fundexternal link, Switzerland must assume its international responsibility and “correct this shocking legal gap”.
On Tuesday, the Swiss House of Representatives is set to examine a motion from Social Democrat parliamentarian Carlo Sommaruga making a similar call. Sommaruga says Switzerland is putting its international reputation at risk if it ignores justified demands from Malaysia to return the money.
Straumann argues that profits from corruption abroad that are confiscated in Switzerland should be treated in the same way as the assets of foreign leaders and returned according to the same principles. The restitution of looted funds of so-called “foreign politically exposed persons (PEPs)” is governed by the 2016 Foreign Illicit Assets Actexternal link.
Over the past two years, the Swiss federal authorities have confiscated more than CHF350 million linked to corruption cases in Brazil, Nigeria and Malaysia.
Malaysian Prime Minister Najib Razak, along with his entourage, is accused of having siphoned off hundreds of millions of francs from the 1MDB sovereign fund which he himself created in 2009. Part of this sum was paid into Swiss bank accounts.
In 2013, the Swiss Financial Supervisory Authority (FINMA) alerted the BSI private bank about the risks of dealing with certain clients linked to the Malaysian fund, and in May 2016, FINMA confiscated CHF95 million of ill-gotten gains.
In July 2016, Swiss banks UBS and Falcon Bank were fined in Singapore for failings in the fight against money laundering linked to this case. Singapore shut down the local units of BSI Bank and Falcon Bank due to failures of money-laundering controls and improper conduct by senior management.