Swiss perspectives in 10 languages

Swiss counter criticism over illegal assets

Mobutu Sese Seko had the power in Zaire, but preferred to stash stolen money in Switzerland Keystone

A senior Swiss diplomat has said Switzerland no longer deserves its reputation as a safe haven for the ill-gotten gains of corrupt dictators.

Speaking in Geneva on Tuesday, ambassador Paul Seger said the government had returned $1.6 billion (SFr1.9 billion) of stolen funds in recent years and was now a model when it came to fighting embezzlement.

Switzerland’s reputation as a deposit box for dirty money got a further airing in author Dan Brown’s Da Vinci Code and the latest James Bond film.

But, according to Seger, who is head of the Swiss foreign ministry’s international law division, the reality is somewhat different.

He said the introduction of tough new banking and anti-money laundering regulations, coupled with breakthroughs in a number of high-profile corruption cases, meant that Switzerland should no longer be seen as a soft touch.

Among the successes cited by Seger were the handover to Nigeria of $700 million linked to former dictator Sani Abacha, and the return to the Philippines of $684 million stashed in Swiss bank accounts by the late dictator Ferdinand Marcos.

“As part of its fight against abuses of its financial centre, Switzerland pays great attention to the problem of dictators’ illicit gains,” he said. “However it has to be recognised that this was not always the case.”

Marcos affair

Swiss officials say it was the Marcos affair, which began in 1986, that precipitated a sea change in the way the government tackled future cases of illegal assets. These include the millions siphoned by Haiti’s Jean-Claude Duvalier and Zaire’s Mobutu Sese Seko; however, both these cases remain stuck in legal limbo.

Among the advances cited by the Swiss are the introduction of a law on money laundering in 1998, the creation of the Money Laundering Reporting Office and greater due diligence by banks as a result of “politically exposed persons” (PEP) and “know your customer” rules.

Improved judicial cooperation is also said to have played a part, notably in the case of the $92 million embezzled by Peru’s former spy chief Vladimir Montesinos.

Seger claims Switzerland is now viewed as a role model by other countries or bodies, such as the G-8. But he says the flipside is that incidents such as the Marcos, Abacha or Montesinos affairs reinforce the international perception that there are still more assets to be returned.

Swiss not alone

The Swiss ambassador, however, made it clear that Switzerland was not the only country to have been found wanting in the past. He said an estimated $1 billion of Abacha’s money was reported to have passed through Britain unmolested.

“We have taken a big stride forward but we need to work to prevent further cases in the future. We will be judged by our actions,” he said.

“If in five years’ time we have no cases, we will have shown that we have learnt the lessons of the past.”

The Swiss Abacha Coalition, which fought successfully to ensure that the redistribution of the former Nigerian dictator’s millions was done in a transparent way, agrees there is still work to be done.

“Some mechanisms that have been put in place are a real improvement compared to international norms, such as the monitoring in the Abacha case,” Max Mader, a coalition member, told swissinfo.

“But the problem of the Swiss financial system being a haven for money laundering has not disappeared.”

swissinfo, Adam Beaumont in Geneva

Earlier this month the Swiss government released $84 million blocked in a corruption case into an independently monitored fund for the benefit of needy children in Kazakhstan.

But just last week the Swiss federal prosecutor abandoned an investigation into suspected money laundering involving the former prime minister of Madagascar.

As a result a Swiss bank will refund SFr2.8 million ($2.3 million) to Tantely Andrianarivo, a move that has “disappointed and shocked” the Madagascan government, which has demanded the money back.

The number of reports on suspicious transactions submitted to the Money Laundering Reporting Office of Switzerland reached 619 in 2006 – down more than 15% on the previous year.
But in 2006 assets amounting to SFr815 million Swiss francs were blocked, up 19.7% from about SFr681 million in 2005.

In compliance with the JTI standards

More: SWI swissinfo.ch certified by the Journalism Trust Initiative

You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.

SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR

SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR