Home Civil Society Voices 2012 Civil Society Voices Swiss government: We’ll freeze Musa, Taib assets if Malaysia cooperates

Swiss government: We’ll freeze Musa, Taib assets if Malaysia cooperates

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The Swiss Federal Council has fueled speculation about the foreign assets of prominent Malaysian politicians, reports the Bruno Manser Fund.

(BERNE, Switzerland) Days after the announcement by Switzerland’s Attorney General that it had opened a criminal case against UBS on grounds of the bank’s suspected laundering of US$90m on behalf of Musa Aman, the brother of Malaysia’s Minister of Foreign Affairs, an official Swiss government statement fuels the debate on the capital flight by Malaysia’s political leaders.

In a written reply to questions submitted last May by the social democrat MP, Carlo Sommaruga, the Swiss Federal Council (government) declares its readiness to freeze illicit assets of politically exposed persons from Malaysia, namely the Chief Ministers of Sarawak and Sabah, Taib Mahmud and Musa Aman. However, this could only happen if Malaysia were to submit legal assistance requests to Switzerland.

The Swiss government states that the Federal Constitution empowers the Federal Council in extraordinary cases to freeze assets of politically exposed persons in Switzerland. “Such a freeze usually happens with a view to entering into legal-assistance relations with the countries of origin. At the moment, such a situation does not exist in the case of Malaysia.”

The Swiss also confirm that, back in 2011, Switzerland “has provided legal assistance in the case of MUSA Bin Aman et al.” to Hong Kong in a case of “criminal collusion in bribery and taking bribes”. The Federal Council also states that, in the Musa case, “Switzerland has hitherto not been requested to provide legal assistance by Malaysia”.

However, the Swiss are clearly indicating their willingness to answer such a request positively: “A possible legal-assistance request by Malaysia would have to be examined by the Federal Office of Justice,” the official statement reads. “Switzerland would provide the requested legal assistance if the legal prerequisites are met and if there are no grounds for exclusion.”

Despite the Swiss government’s refusal to disclose details on specific cases, the carefully worded answer appears to confirm the existence of Taib assets in Switzerland when it refers to “the possibility of freezing the Taib assets by the Federal Council”. Last year, in a formal announcement in the Sarawak state assembly, the Sarawak Chief Minister categorically denied that he held assets in Switzerland or with Swiss banks.

During the past 15 years, Switzerland has returned CHF1.7bn Swiss of illicit funds to the countries of origin, “more than any other finance centre of comparable size”. Currently, the Egyptian government is putting pressure on Switzerland for the quick release of CHF700m embezzled by the former Egyptian ruler, Hozni Mubarak.

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Parliamentary questions by MP Sommaruga
Source: www.parlament.ch Translation: Bruno Manser Fund

12.3395 – Questions in parliament („interpellation“)

Kickbacks from the logging of tropical rainforests and other PEP assets from Malaysia in Switzerland
Submitted by: MP Sommaruga Carlo
Date of submission: 03 May 2012
Submitted in the: National Council
Status of debate: not yet debated in the plenary

Questions tabled

According to a report in the “Sonntagszeitung” of 22 April 2012, the Malaysian politician Musa Aman has received over USD 90 million in kickbacks from the logging of tropical rainforests in Borneo. These proceeds of corruption have reportedly been laundered through UBS accounts in Hong Kong and also deposited in Switzerland. According to the Office of the Attorney General, Switzerland has provided legal assistance.

Musa Aman is the head of government of the Malaysian state of Sabah and the brother of the Malaysian Minister of Foreign Affairs. Prior to him, Taib Mahmud, head of government of the Malaysian state of Sarawak, had already been accused of having deposited illegally acquired assets in Switzerland.

1. Can the Federal Council confirm that Switzerland has provided legal assistance to Hong Kong in the case of Musa Aman and his nominees? What authority in Hong Kong requested legal assistance from Switzerland? What offences did it refer to?

2. Has Switzerland also been asked for legal assistance by the Malaysian authorities? Would the Federal Council be willing to provide legal assistance to Malaysia?

3. Did the legal assistance in the Aman case extend to other financial services providers than UBS?

4. Is the Federal Council prepared to freeze assets possibly held by Musa Aman in Switzerland?

5. In April 2011, former Federal Councillor Micheline Calmy-Rey forwarded an inquiry from the Bruno Manser Fund on PEP assets held by the Taib family to FINMA. What action did FINMA take? Is the Federal Council prepared to freeze possible Taib assets in Switzerland?

6. Did the Money Laundering Reporting Office (MLRO) act? On what grounds, with whom and with what outcome?

7. What measures is the Federal Council taking to prevent the depositing of PEP assets of criminal origin from Malaysia in Switzerland?

8. How does the Federal Council enforce the due-diligence duties of UBS and other Swiss asset managers when dealing with assets of politically exposed persons (PEPs) from Malaysia?

9. Does the Federal Council have figures on the value of the assets of politically exposed persons from Malaysia in Switzerland? If so, what are the estimates of such assets?

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10. How does the Federal Council intend to deal with the question of Malaysian PEPs’ assets in the context of the negotiations envisaged with a view to a free-trade agreement between EFTA and Malaysia?

Reply by the Federal Council of 22 August 2012

Re. 1: Switzerland has provided legal assistance in the case of MUSA Bin Aman et al. to the Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China concerning criminal collusion in bribery and taking bribes.

The requesting authority was the Ministry of Justice of the HKSAR of the People’s Republic of China. The Swiss executing agency was the Office of the Attorney General of Switzerland.
The outcome of the execution of the request for legal assistance was been transmitted to the requesting authority in Hong Kong in spring 2011 on the basis of the legal-assistance request,

Re. 2: In this matter, Switzerland has hitherto not been requested to provide legal assistance by Malaysia. A possible legal-assistance request by Malaysia would have to be examined by the Federal Office of Justice, which is in charge of dealing with legal-assistance requests. Switzerland would provide the requested legal assistance if the legal prerequisites were met and if there were no grounds for exclusion.

Re. 3: The legal assistance in the MUSA Bin Aman et al. case did not affect other financial services providers.

Re. 4: Article 184 (3) of the Federal Constitution empowers the Federal Council [the Swiss government] in extraordinary cases to freeze assets held by politically exposed persons in Switzerland. Such a freeze usually happens with a view to entering into legal-assistance relations with the countries of origin. At the moment, such a situation does not exist in the case of Malaysia.

Re. 5: It is the task of FINMA to examine all indications of possible violations of due-diligence requirements. Because of official secrecy, it is not possible to release information on the outcomes of such examinations in specific cases. As to the possibility of freezing the Taib assets by the Federal Council, reference is made to Answer 4.

Re. 6: As regards data processing, the Money Laundering Reporting Office (MLRO) is subject to official secrecy. Thus, no information can be provided on specific cases.

Re. 7 and 8: Combatting corruption and the return of funds embezzled by politically exposed persons to the countries affected are priority concerns of the Federal Council. Switzerland has comprehensive anti-money-laundering legislation that places for far-reaching due-diligence and reporting duties on financial institutes. Business relations with politically exposed persons are always, according to Art. 12 (3) of the FINMA money-laundering ordinance (GwV-FINMA), business relations with increased risks, which entails additional examination duties as laid down in to Art.14 GwV-FINMA. In the course of the additional examinations, the origin of the deposited assets as well as the backgrounds and plausibility of larger incoming payments must to be explicitly examined. Compliance with formal and material due-diligence duties are tested by review ((audit)) companies and reported to FINMA by way of review reports. Additionally, FINMA has refined and tightened up its direct supervisory reviews of banks in the course of recent years. In this context, the implementation and compliance with heightened due-diligence duties in business relations with increased risks, and particularly in dealing with politically exposed persons, has been reviewed. FIMNA performs intensive monitoring of the implementation of measures introduced to correct weaknesses that have been uncovered. FINMA has extensively described the regulation and monitoring of business relations with politically exposed persons in its reports dated 11 March 2011 and 10 November 2011 (Sorgfaltspflichten der Schweizer Banken im Umgang mit Vermögenswerten von “politisch exponierten Personen” – Untersuchung der FINMA abrufbar unter http://www.finma.ch/d/finma/publikationen/Seiten/berichte.aspx).

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Should, despite these precautionary measures, assets of criminal origin be deposited in Switzerland, these will have to be identified and, if possible, returned to the countries of origin. In this way, Switzerland has, in the course of the past 15 years, returned approximately CHF 1.7 billion to the countries of origin, more than any other financial centre of comparable size.

Re. 9: There is no centralised data available on the establishment of business relations between Swiss banks and politically exposed persons. The banks are responsible for the management of business relations with increased risks and there is no legal base for a transmission of this data to FINMA.

Re. 10: Based on the declaration of cooperation of 20 July 2010, Switzerland and the other EFTA countries (Iceland, Principality of Liechtenstein and Norway) are currently conducting a dialogue with Malaysia. The aim of the declaration of cooperation is to examine the possibilities and means of intensifying the economic partnership between the parties. In this context, the EFTA countries and Malaysia have undertaken initial preliminary measures with a view to preparing negotiations of a free-trade agreement. The questions discussed in this context do not fall within the ambit of Switzerland’s policy in the field of economic crime.

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