Suspicious Cash Returns To Switzerland

Criticism of current Swiss banking practices is mounting following recent revelations that funds from corrupt foreign leaders are being stored in Swiss banks. Experts and politicians are calling for money laundering laws to be tightened.

Critics say Swiss banks sometimes store ill-gottten savings
Critics say Swiss banks sometimes store ill-gottten savings
David Vonplon

In the past, Switzerland was always busy positioning itself as a pioneer in the fight against money laundering. But it also didn't shy away from dealing with dictators' funds. The nation recently earned praise abroad following the introduction of the "Lex Duvalier," which ordered the return to Haiti of stolen funds from former dictator Jean-Claude Duvalier. Not long ago, a journalist wrote in the New York Times that Switzerland was on its way to becoming "one of the most forward-looking countries in the quest to return stolen assets to developing countries."

Recently, however, reports that funds of dubious origin from Tunisia, the Ivory Coast and Kazakhstan are being kept in Swiss banks, and that former Egyptian President Hosni Mubarak has accounts in Switzerland, are threatening to damage the Confederacy's exemplary image.

"What's the use of Switzerland acting as a pioneer in the repatriation of funds with its new Potentates Act, when it still remains one of the first places where assets of dubious origin are deposited?" asks Mark Herkenrath of the Bern-based NGO Alliance Sud.

Herkenrath is among those calling for a reversal of the onus of proof when dealing with potentate funds, as applies to Mafia funds in Switzerland. This will require politically exposed people to prove they acquired their money legally when they open accounts and conduct larger transactions. The proposal comes from criminal law professor Mark Pieth, but has not yet received a hearing in the Federal Council.

In politics it's the Social Democrats that most want to ratchet up the pressure on the banks. Responding to an inquiry about her party's campaign to deal with politically exposed persons, Social Democrat National Councillor Susanne Leutenegger announced two main strategies. On the one hand, the party is demanding that the Swiss Financial Market Authority (Finma) disclose to the National Council Economic Commission how closely it monitors potential money laundering by the banks. At the same time, the party intends to submit a motion during the winter session calling for a revision of the Money Laundering Act. The Social Democrats want to ensure politically compromised figures have to prove their money is clean.

Financial expert and former head of the Money Laundering Reporting Office Daniel Thelesklaf believes Switzerland has lost its pioneering role in dealing with politically exposed persons. He says the nation has fallen behind other top financial centers such as Luxembourg or Liechtenstein.

Thelesklaf points to the low number of suspicious transactions being reported to the Money Laundering Reporting Office as evidence of this trend. In 2009, the Principality received around 260 reports of suspicious transactions. In Switzerland, only three times as many reports were received in the same year – even though its financial sector is 30 times larger.

Lost customers

According to Thelesklaf, the banks are reluctant to report suspicious transactions since they are only obliged to report them in cases where there is "reasonable suspicion" the assets are derived from criminal sources. In other words, the bank must have concrete evidence of an offense. "No bank would alert the authorities on the basis of suspicion alone," said Thelesklaf.

Banks pay a high price when they report their suspicions to the authorities. The account holder's assets are immediately blocked and the banks usually lose the customer. Moreover, in Switzerland this process leads in nine out of 10 cases to the opening of criminal proceedings, which can also lead to a loss of reputation for the bank. "Many banks therefore avoid reporting to the authorities whenever possible," said Thelesklaf.

Experts also see gaps in money laundering regulations relating to transactions outside of the banking sector. The housing sector, for example, is not subject to the Money Laundering Act. "It's purely the absence of a legal obligation for estate agents to report suspicious financial activity that allowed the daughter of an Uzbek ruler to buy a villa in Geneva worth 70 million francs (55.5 million Euros) without being challenged," says Thelesklaf. Green Party National Councillor Bill Weiss called for an extension of the Money Laundering Act in a postulate back in December.

The Bankers Association doesn't see any need for action. "Switzerland has a good system for dealing with politically exposed persons," says spokesman Thomas Sutter. The number of reports of suspicious activity from banks may be fewer than in other countries, he says, but the reports themselves are more substantial. Sutter believes reversing the onus of proof for potentate funds would be impracticable and "legally questionable."

"It would place an entire group of people under general suspicion," says Sutter.

Read the original article in German

Photo credit-Grittycitygirl

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Paying tribute to the victims of the attack in Kongsberg

Terje Bendiksby/NTB Scanpix/ZUMA
Carl-Johan Karlsson

The bow-and-arrow murder of five people in the small Norwegian city of Kongsberg this week was particularly chilling for the primitive choice of weapon. And police are now saying the attack Wednesday night is likely to be labeled an act of terrorism.

Still, even though the suspect is a Danish-born convert to Islam, police are still determining the motive. Espen Andersen Bråthen, a 37-year-old Danish national, is previously known to the police, both for reports of radicalization, as well as erratic behavior unrelated to religion.

Indeed, it remains unclear whether religious beliefs were behind the killings. In an interview with Swedish daily Dagens Nyheter, police attorney Ann Iren Svane Mathiassens said Bråthen has already confessed to the crimes, giving a detailed account of the events during a three-hour interrogation on Thursday, but motives are yet to be determined.

Investigated as terrorism 

Regardless, the murders are likely to be labeled an act of terror – mainly as the victims appear to have been randomly chosen, and were killed both in public places and inside their homes.

Mathiassens also said Bråthen will undergo a comprehensive forensic psychiatric examination, which is also a central aspect of the ongoing investigation, according to a police press conference on Friday afternoon. Bråthen will be held in custody for at least four weeks, two of which will be in isolation, and will according to a police spokesperson be moved to a psychiatric unit as soon as possible.

Witnesses have since described him as unstable and a loner.

Police received reports last year concerning potential radicalization. In 2017, Bråthen published two videos on Youtube, one in English and one in Norwegian, announcing that he's now a Muslim and describing himself as a "messenger." The year prior, he made several visits to the city's only mosque, where he said he'd received a message from above that he wished to share with the world.

Previous criminal history 

In 2012, he was convicted of aggravated theft and drug offenses, and in May last year, a restraining order was issued after Bråthen entered his parents house with a revolver, threatening to kill his father.

The mosque's chairman Oussama Tlili remembers Bråthen's first visit well, as it's rare to meet Scandinavian converts. Still, he didn't believe there was any danger and saw no reason to notify the police. Tlili's impression was rather that the man was unwell mentally, and needed help.

According to a former neighbor, Bråthen often acted erratically. During the two years she lived in the house next to him — only 50 meters from the grocery store where the attacks began — the man several times barked at her like a dog, threw trash in the streets to then pick it up, and spouted racist comments to her friend. Several other witnesses have since described him as unstable and a loner.

The man used a bow and arrow to carry the attack

Haykon Mosvold Larsen/NTB Scanpix/ZUMA

Police criticized

Norway, with one of the world's lowest crime rates, is still shaken from the attack — and also questioning what allowed the killer to hunt down and kill even after police were on the scene.

The first reports came around 6 p.m. on Wednesday that a man armed with bow and arrow was shooting inside a grocery store. Only minutes after, the police spotted the suspect; he fired several times against the patrol and then disappeared while reinforcements arrived.

The attack has also fueled a long-existing debate over whether Norwegian police should carry firearms

In the more than 30 minutes that followed before the arrest, four women and one man were killed by arrows and two other weapons — though police have yet to disclose the other arms, daily Aftenposten reports. The sleepy city's 27,000 inhabitants are left wondering how the man managed to evade a full 22 police patrols, and why reports of his radicalization weren't taken more seriously.

With five people killed and three more injured, Wednesday's killing spree is the worst attack in Norway since far-right extremist Anders Breivik massacred 77 people on the island of Utøya a decade ago.

Unarmed cops

As questions mount over the police response to the attack, with reports suggesting all five people died after law enforcement made first contact with the suspect, local police have said it's willing to submit the information needed to the Bureau of Investigation to start a probe into their conduct. Police confirmed they had fired warning shots in connection to the arrest which, under Norwegian law, often already provides a basis for an assessment.

Wednesday's bloodbath has also fueled a long-existing debate over whether Norwegian police should carry firearms — the small country being one of only 19 globally where law enforcement officers are typically unarmed, though may have access to guns and rifles in certain circumstances.

Magnus Ranstorp, a terrorism expert and professor at the Swedish Defence University, noted that police in similar neighboring countries like Sweden and Denmark carry firearms. "I struggle to understand why Norwegian police are not armed all the time," Ranstorp told Norwegian daily VG. "The lesson from Utøya is that the police must react quickly and directly respond to a perpetrator during a life-threatening incident."

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