Swiss ambassador to Luxembourg arrested

Switzerland's ambassador to Luxembourg, Peter Friederich, has been arrested in connection with alleged money laundering.

The Federal Prosecutor’s Office said Friederich had been taken into custody on Swiss soil on Monday.

In a statement, the prosecutor’s office said the arrest had been made “in connection with private transactions worth hundreds of thousands of francs”.

It added that it wasn’t clear where the money had come from.

But legal sources in Luxembourg told swissinfo the money was thought to come from drugs trafficking and to total half a million francs.

Police have reportedly been monitoring Friederich for almost a year.

The prosecutor’s office said the Luxembourg authorities told the Swiss in February about suspected money laundering.

Tip-off from Luxembourg

Hansjürg Mark Wiedmer, a spokesman for the Prosecutor’s office, told swissinfo that authorities were eager to uncover the origins of the money.

“We were informed by the authorities in Luxembourg at the end of February,” Wiedmer said.

“On April 8, the Swiss Federal Prosecutor’s Office opened its investigation into unknown persons.

“And after we got more information from Luxembourg we extended this investigation to the ambassador [on July 3].”

The legal sources in Luxembourg told swissinfo that because of his diplomatic status, the Luxembourg authorities were not able to arrest Friederich themselves, so had passed their dossier on Friederich to Switzerland.

“If we could have done, we would gladly have arrested him,” the sources said.

Wiedmer said the alleged laundering was a private matter and did not affect the Swiss embassy.

Harsh condemnation

Swiss political figures branded the Friederich case as a scandal which threatened to undermine Switzerland’s defence of its banking secrecy laws.

The centre-left Social Democratic also said the case would weaken the Swiss cabinet’s credibility in its negotiations with the European Union on a series of sensitive bilateral agreements dealing with cross-border taxation.

The EU wants access to account details of its citizens who hold bank accounts in Switzerland – something the Swiss government maintains is not negotiable.

The centre-right Radical Party described the case as a scandal and bitter disappointment, given the crucial role of Switzerland’s dipomatic corps.

The Christian Democratic Party warned against drawing premature conclusions, but called for a quick clarification of the facts.

Experienced diplomat

The 60-year-old Friederich was ambassador to Vietnam and Cuba before taking up his post in Luxembourg in December 1999.

Born in St Gallen and educated in political science at the University of Geneva, he has worked for the foreign ministry since 1971.

He was responsible for recruitment and training in 1978, and prior to his posting to Vietnam in 1990, helped coordinate foreign ministry aid work in central and eastern Europe.

Laws work

Luc Frieden, the Luxembourg minister for justice, praised cooperation with Swiss authorities involved in the arrest.

Frieden said the case, and all the work involved in recent months, confirmed that cross-border investigations worked, particularly in the fight against international criminality.

He also said the case had demonstrated the effectiveness of Luxembourg’s money laundering laws.

However, he emphasised that Friederich was entitled to a presumption of innocence.

Tough money laundering laws

The Prosecutor’s Office said it opened its investigation against Ambassador Friederich based on money laundering provisions within the Swiss Penal Code.

It said the case hinged on article 305 of the Code, which imposes reporting obligations on financial intermediaries aware of criminal proceeds.

The money laundering law was introduced in 1998. It extended existing due diligence obligations – or so-called “know-your-customer-rules” – from banks to include financial intermediaries, such as brokers or lawyers.

Wiedmer said he could give no more details about the case because of ongoing investigations.

swissinfo