Ill-gotten gains are not safe in Swiss banks
An important test case for the way Switzerland handles money from suspicious sources comes up at the end of February.
That is when the account holding SFr8 million or so ($6.9 million) deposited in Swiss banks by the late president of Zaire, Mobutu Sese Seko, is due to be unfrozen.
But it is not in fact clear what will happen.
Despite its reputation for turning a blind eye to the source of deposits, Switzerland’s recent record for handing back the ill-gotten gains of fallen despots to the country of origin has been good.
Although the Democratic Republic of Congo (DRC) – as Zaire is now known – started proceedings to recover the money almost immediately after Mobutu’s death in 1997, its judicial authorities did not submit the necessary documents to back its claim.
Under Swiss law, the money could not be returned to the DRC without a court decision in that country.
At the end of 2003 the Swiss foreign ministry asked for Mobutu’s accounts to be frozen, to enable it to provide the DRC with the necessary legal assistance to reach such a decision.
Just before it was due to expire in December 2008, this freeze was extended to February 28. Otherwise the money would automatically have gone to Mobutu’s family, given that its origin had not been legally determined.
Case pending
Pressure from Congolese NGOs, supported by the Swiss independent monitor Aktion Finanzplatz Schweiz, had managed to prevent the accounts being unfrozen, the NGO’s Max Mader told swissinfo.
DRC President Joseph Kabila has now engaged Swiss lawyer Enrico Monfrini to start the necessary proceedings.
Monfrini recently submitted a claim, a legal move which will keep the accounts frozen. The prosecutor’s office is now checking the case, its spokeswoman Walburga Bur told swissinfo.
However, the money cannot remain frozen indefinitely after the end of February.
There are three possible outcomes. If the Congolese claim is found to be valid, proceedings will be instituted. The money will stay blocked, and ideally will one day be returned.
On the other hand, the claim could be accepted but the legal situation may not be clear enough to produce a judgement.
The third alternative is that the claim might be rejected under Swiss law. Since it is generally accepted Mobutu siphoned off his country’s money for his own use, most people would regard this as an unsatisfactory outcome.
Restitution
In the past few years Switzerland has returned more than $1.6 billion to countries once run by dictators.
“Switzerland has nothing to gain by being a haven for the money of despots,” Falco Galli of the Federal Justice Office told swissinfo.
The country has long experience in responding to requests for legal assistance and in the restitution of money, he pointed out.
The two biggest cases involved Sani Abacha, where $500 million were returned to Nigeria, and Ferdinand Marcos, where some $680 million went back to the Philippines.
The Abacha case was a milestone for two reasons, said Mader.
On the one hand, because the society which had been cheated of the money was given the chance to say what should be done with it, and on the other, because a charge was successfully brought against an “organised criminal group”.
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Money laundering
Legal measures
The task of restoring money to the country it has been stolen from is often complicated by the fact that people from the entourage of the dictator in question may spin out court cases for years in the hope of getting it for themselves.
Nevertheless, a broad range of actors in Switzerland is working to ensure that this does not happen.
A coalition made up of seven NGOs – including Aktion Finanzplatz Schweiz – which has specialised in the issue of dictators’ money says that significant progress has been made.
It is thanks to pressure from the NGOs that the government has moved on the issue, said Mader. The directorate of public international law of the Swiss foreign ministry has also looked for solutions, he added.
In December the Swiss federal government proposed a law designed to ensure that the return of stolen money is not blocked simply because a dictator has undermined the state institutions to such an extent that they no longer function.
In certain circumstances the onus could lie with the depositor to prove the legal origin of the funds, rather than with the plaintiff to prove that they were stolen.
As far as the Mobutu case is concerned, for example, Switzerland abandoned its legal assistance involvement in 2003 after it took the view that the Congolese authorities were not in the position to institute a legal process that fitted constitutional criteria.
“We all presume that the money was stolen, and it would not be right for it to go back to the Mobutu family,” Valentin Zellweger, of the international public law directorate of the Swiss foreign ministry, told swissinfo.
“There must be no more such cases.”
swissinfo, based on an article in German by Viera Malach, InfoSüd agency
In 1965 General Mobutu Sese Seko came to power in Congo, a Belgian colony until 1960, in a coup and renamed the country Zaire in 1971.
After decades of dictatorship, Mobutu was ousted by the alliance under Laurent-Désiré Kabila who proclaimed himself president of the Democratic Republic of Congo in 1997.
Zaire’s new rulers accused Mobutu, who was forced into exile in Morocco where he died shortly afterwards, of siphoning off government funds and stashing away assets worth billions of francs in Switzerland.
Switzerland says the amount is far less.
When Kabila was assassinated in 2001 he was succeeded by his son, Joseph Kabila.
In response to a request for legal assistance by Kinshasa in 1997, the Swiss authorities froze SFr10 million deposited by Mobutu and his family.
They also auctioned off Mobutu’s villa on Lake Geneva for an additional SFr3.1 million in 2001.
In 2007, Swiss Foreign Minister Micheline Calmy-Rey said the Mobutu account contained about SFr8 million.
Under Swiss law the money cannot be returned to the Congo without a court decision in that country.
In 2003 Switzerland concluded that the Congolese authorities were not able to institute legal proceedings that met constitutional criteria.
Without a proper ruling in Congo, the money would have gone to the Mobutu family at end of 2008.
The Swiss government froze the accounts until February 28 2009 to prevent this happening.
A Swiss lawyer, acting for Congo, has now started proceedings.
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