Home Civil Society Voices 2017 Civil Society Voices NGOs launch initiative to seek return of frozen money-laundered funds

NGOs launch initiative to seek return of frozen money-laundered funds


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C4 Center and Bersih 2.0 are leading the charge to ensure that asset recovery — a technical term,  that means “any effort by governments to repatriate the proceeds of corruption hidden in foreign jurisdictions” — can happen with confiscated illegal gains from money laundered from 1MDB funds in Switzerland.

C4 Center, Bersih 2.0 and endorsing Malaysian NGOs are in partnership with the Bruno Manser Fund and Global Bersih, both of which are based in Switzerland, and are assisting through Swiss-based lobbying, in the pursuit of returning illicit gains to Malaysians who are the rightful beneficiaries.

The Global Forum on Asset Recovery is the first worldwide conference that focuses on returning stolen and laundered money to their countries of origin. It brings together financial investigators, police, prosecutors, judges and civil society representatives to discuss the technical aspects and best practices of enabling asset recovery, focusing on four priority countries.

GFAR was initiated as a result of the London 2016 Anti-Corruption Summit, with the participation of 42 nations and the support of the Stolen Asset Recovery Initiative of the World Bank.

Despite Malaysia’s lack of participation in GFAR because of the complicity of current authorities, C4 Center and Bersih 2.0 will be paying close attention to GFAR and will engage stakeholders to explore the possibilities for a more concrete proposal.

“We know that the management of 1MDB is complicit in the money laundering of its funds overseas, so we cannot unconscionably allow the Swiss to return it to the regime that stole public monies; it is neither right that the Swiss government take the money simply because the money was so happened to be laundered through banks there.”                                                                                                                                    – Maria Chin, Bersih 2.0

Such complicity was demonstrated when the Swiss Attorney General announced that they were investigating over US$4bn of embezzled funds linked to 1MDB investments early last year. After twice requesting for  ‘mutual legal assistance’ from their Malaysian counterparts, they failed to receive a positive reply from the Malaysian government.

Nevertheless, the Swiss Attorney General’s office has pushed ahead with investigations and is currently gathering sufficient evidence to take appropriate actions. In the meantime, the Swiss financial regulatory body, Finma, has already punished three Swiss banks for serious breaches of money laundering regulations and has confiscated a total of 104 million Swiss francs in illicit gains from money laundering. The three banks are appealing the decision.

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Our proposal: An interim trust fund

The 14th General Elections is an important milestone to forward this process, as in the event of a regime change, the restitution process could possibly be fast-tracked by the new government in place.

However if regime change is unlikely, C4 Center and Bersih 2.0 urge the Swiss government to consider the setting up of an interim trust fund, assisted by the World Bank or other institutions, to help return the stolen money and return it to the rightful people of Malaysia.

A precedent set by the Bota Foundation in Kazakhstan, makes a good example.

 “We believe that a fraction of the embezzled 1MDB money can come back to benefit Malaysians because precedent has been set through the Bota Foundation. It was the first of its kind, a vehicle to return illicit funds back to the public of the country of its origin.”

– Cynthia Gabriel, C4 Center

The 112 Malaysian CSOs are advocating the model of the Bota Foundation, which was set up in 2007 to return US$84m to the Kazakhstan public.  It disbursed its money through three programmes: a direct cash transfer programme which gave money upon fulfilling conditions such as sending children to pre-school; a social service programme which gives medium-sized grants to local NGOs; and, a tuition assistance programme which gave scholarships to Kazakhstani youth

Like 1MDB, the money that became its funds was allegedly payment in bribes to Kazakhstani elites. They were also the target of a civil forfeiture lawsuit by the US Department of Justice and laundered through Swiss bank accounts, which the Swiss government froze in the late 1990s.

This submission to the Swiss government is to persuade them to use frozen gains from 1MDB funds in a similar fashion to the Bota Foundation, to prevent the funds from returning to a kleptocratic government.

Under Swiss law, such confiscated assets either are appropriated by the Swiss government or paid to the parties suffering the loss. Either outcome would undermine the spirit of anti-corruption it has demonstrated before in the Bota Foundation.

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This civil society grouping believes that the Swiss government needs to continue to live up to its reputation of uncompromisingly stamping out money laundering by considering at the earliest outset, that the funds be used to benefit the Malaysian public, in line with developing global practices in asset recovery against kleptocracies. We urge that they take the necessary steps, legal and otherwise, to set an example to all states, and ensure a wrong is put right.

We call on the international community to support this call to restore what is rightfully the money of every Malaysian citizen.

Released by:

Ms. Cynthia Gabriel, C4 Center
Ms. Maria Chin Abdullah, Bersih 2.0
Mr. Bala Chelliah, Bersih Global

Endorsed by:
Academy of Tamil Studies
All Women’s Action Society (Awam)
Angkatan Mahasiswa UM (Angkatan)
Angkatan Warga Aman Malaysia (WargaAman)
Association of Friends of Women, Selangor (PSWS – Persatuan Sahabat Wanita, Selangor)
Borneo Activist Center (Borac)
Borneo Komrad
Borneo Resources Institute, Malaysia (Brimas)
Centre for Independant Journalism, Malaysia (CIJ)
Centre of Education, Research and Development (Cedar)
Child Development Initiative
Community Action Network (CAN)
Council of Temples Malaysia
Dayak Think-Tank Group (DTTG)
Demi Malaysia
Federation of Malaysian Indian Organisations (Prima)
G7 Mengkawagu, Tongod
Gabungan Pertubuhan-pertubuhan Masyarakat India Selangor (Coalition of Selangor’s Indian Community Organisations)
Green Assembly (Himpunan Hijau)
Group of Concerned Citizens Malaysia
Indian Malaysian Active Generation (Image)
Institut Wanita Berdaya (IWB)
Islamic Rennaisance Front (IRF)
Jaringan Kampung Orang Asli Semenanjung Malaysia (JKOASM) (Indigenous People’s Village Network of Peninsular Malaysia)
Jaringan Orang Asal Semalaysia (JOAS)
Jaringan Tanah Hak Adat Bangsa Asal Sarawak (Tahabas) (Sarawak Native Customary Land Rights Network)
Jawatankuasa Gabungan Pengurusan Tanah Tongod
Johore Yellow Flame
Kelab Bangsar Utama [Bangsar Utama Club]
Kesatuan Mahasiswa Malaysia (Kesatuan)
Kill the Bill
KL- Selangor Hokkien Association Youth Section
Kuala Lumpur – Selangor Chinese Assembly Hall (KLSCAH)
Kuala Lumpur – Selangor Chinese Assembly Hall Women Section
Kuala Lumpur Indian Entrepreneurs and Professionals
Lawyer Kamek 4 Change (LK4C) Sarawak
Lawyers for Liberty (LfL)
Malaysia Indian Progressive Educational Society
Malaysia Tamil Artiste Association
Malaysia Youth & Students Democratic Movement (Dema)
Malaysian Association of Indian University Graduates
Malaysian Dravidian Association
Malaysian Hindu Youth Council
Malaysian Indian Business Association
Malaysian Indian Development & Unity Association
Malaysian Indian Entrepreneurs and Professionals
Malaysian Indian Historical Association
Malaysian Indian Progressive Association (Mipas)
Malaysian Indian Youth Development Foundation
Malaysian Physicians for Social Responsibility
Mama Bersih
Movement for Change Sarawak (MoCS)
Muslim Youth Movement of Malaysia (Abim)
National Human Rights Society (Hakam)
National Union of Malaysian Muslim Students (PKPIM)
Nationwide Human Development And Research Centre
Oriental Heart and Mind Study Institute (OHMSI)
Partners of Community Organizations in Sabah (Pacos Trust)
Penuntut Tanah Adat Mukim Dalit Sook
Perak Civic Forum
Persahabatan Semparuthi Johore
Persatuan Dayak Sarawak (PEDAS – Association of Dayak, Sarawak)
Persatuan Kesedaran Komuniti Selangor (Empower)
Persatuan Peduli Rakyat, Kelantan
Persatuan Usahasama Kampung Gabungan (Pusakag) (Coalition of Inter-village Cooperation Organisations)
Pertubuhan Ikram Malaysia (Ikram)
Pertubuhan Rakyat Alutok Ulu Tomani
Pertubuhan Rakyat Angkawangan
Pertubuhan Rakyat G5 Monongkad Tinungkusan
Pertubuhan Rakyat Kanibongan
Pertubuhan Rakyat Kumpulan Anak Seni Tidong (Kasti)
Pertubuhan Rakyat Mukakas, Miulud Karaja Koubasanan Songovian, Kg Kipouvo, Penampang
Pertubuhan Rakyat Piriton Rahaling, Kalampun
Pertubuhan Solidariti Hijau Kuantan (Association of Green Solidarity, Kuantan)
PLUsos Malaysia
Projek Dialog
Pusat Komunikasi Masyarakat (Pusat Komas)
RAPAT Malaysia Organisation
Research for Social Advancement (Refsa)
Rise of Sarawak Efforts (Rose)
Rudra Devi Samaj Kuala Lumpur
Sarawak Dayak Iban Association (Sadia)
Save Malaysia Stop Lynas
Save Rivers
Saya Anak Bangsa Malaysia (SABM)
Selangor Action Team
Selangor Indian Entrepreneurs and Professionals
Semparuthi Iyakkam
Sisters in Islam (SIS)
Student Progressive Front Universiti Sains Malaysia
Student Progressive Front Universiti Utara Malaysia
Suara Mahasiswa
Suara Rakyat Malaysia (SUARAM)
Sunflower Electoral Education Movement (Seed)
Tamil Youth Bell Club
Teoh Beng Hock Trust for Democracy
Tindak Malaysia
Tobpinai NIngkokoton Koburuon Kampung (Tonibung)
University of Malaya Association of New Youth (Umany)
WIRDA Selangor dan Kuala Lumpur (Wirda)
Women’s Centre for Change (WCC)
Women’s Development Organisation (WDO) Petaling Jaya branch
World Tamil Federation – Malaysian Chapter
Writer Alliance for Media Independence (Wami)
Youth Era

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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