The Swiss federal prosecutor's office in Bern has opened an investigation into allegations of corruption surrounding arms deals by the British firm BAE Systems.This content was published on May 12, 2007 - 18:43
A spokeswoman said the investigation concerns suspicions of money laundering involving the aerospace company but declined to give further details so as not to prejudice the inquiry.
Jeannette Balmer told the Associated Press the investigation was the result of a report prosecutors received from the Swiss money laundering authority.
The British government in December called off an inquiry into a multi-billion dollar arms deal between BAE Systems and Saudi Arabia, saying it was acting to protect national security and British jobs.
Prime Minister Tony Blair told lawmakers that continuing the Serious Fraud Office investigation "would do enormous damage to our relationship with Saudi Arabia", which, he said, was strategically important.
The SFO had been investigating allegations that BAE ran a £60 million (SFr144.9 million) "slush fund" offering sweeteners to Saudi officials, reportedly via Swiss bank accounts, in return for lucrative contracts as part of the Al-Yamamah arms deal in the 1980s. BAE has denied any wrongdoing.
Al-Yamamah, meaning "the dove", was the name given to an agreement under which BAE supplied Tornado fighter jets and other military equipment to Saudi Arabia.
The full extent of the deal, which Saudi Arabia paid for by supplying the British government - BAE's largest shareholder - with oil, was never revealed. However, it was widely believed to be Britain's largest-ever export agreement.
Blair's decision to call off the SFO probe earned a complaint from the United States government and a strong rebuke in January from the Organisation for Economic Cooperation and Development, which questioned whether the move conformed to the group's commitment to combat corruption. Britain is a member of the Paris-based OECD.
An OECD working group on bribery led by Swiss jurist Mark Pieth said in March it would continue to examine closely Britain's anti-corruption efforts.
The following month Britain's Guardian newspaper reported that London was exerting pressure on the OECD to have Pieth removed from his post to prevent further criticism of the conduct of government ministers and BAE in the affair.
The SFO in June last year asked Switzerland for legal assistance in its probe of the Saudi deal. The request was put on hold after the British government called off the probe, but it was never formally withdrawn.
Balmer said separate requests from the SFO for legal assistance into possible BAE bribes to Tanzania, Romania, Chile and the Czech Republic were also still being considered.
She said prosecutors had yet to decide whether to pass on bank documents relating to these cases to British authorities.
The Czech case has caused concern in Sweden because it relates to a deal, which was later cancelled, to sell 14 Gripen fighter jets to the Czech Republic as part of a joint venture between BAE and Sweden's Saab.
swissinfo and Balz Bruppacher (AP)
Britain's Serious Fraud Office opened an investigation into the alleged creation by BAE Systems of "slush funds" in banks in Switzerland with about SFr145 million. These were reportedly intended to pay kickbacks for arms contracts in Saudi Arabia.
In June 2006, it asked for judicial assistance from Switzerland, which was granted by the Federal Prosecutor's Office. Information on accounts belonging to about a dozen account holders was released but the funds were not frozen.
In November, Geneva lawyers acting for those concerned contested whether the British should be allowed to investigate in Switzerland. The Federal Court sided with the lawyers, believing that guarantees of discretion from the British were insufficient.
Nothing else happened, after London ordered the investigation to be halted. In December, the Serious Fraud Office suspended its request to Switzerland, without officially withdrawing it.
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