Laundering of funds misappropriated from the Russian Treasury: closure of proceedings and partial forfeiture of assets
Bern, 27.07.2021 - On 21.07.2021 the Office of the Attorney General of Switzerland (OAG) closed the criminal proceedings being conducted against persons unknown on suspicion of money laundering committed in Switzerland between 2008 and 2010. The case related to fraud committed in Russia against Russian tax authorities at the end of 2007. The forfeiture of a sum equivalent to more than CHF 4 million has, however, been ordered.
Investigations in Switzerland
Based on areport alleging criminal activity filed by Hermitage Capital Management Ltd ("Hermitage"), a company based in London founded by William Browder, and a report of suspicions of money laundering, the OAG opened a criminal investigation on 3 March 2011 against persons unknown on suspicion of money laundering (Art. 305bis Swiss Criminal Code [SCC]).
More specifically, the OAG's suspicions related to acts of money laundering alleged to have been committed in Switzerland between 2008 and 2010, following a fraud committed in Russia to the prejudice of Russian tax authorities at the end of 2007, which led to undue tax refunds totalling an equivalent of USD 230 million being made. These funds were alleged to have been laundered first in Russia and then in several other countries, and partly in Switzerland. In response, the OAG ordered the seizure of assets equivalent to around CHF 18 million.
During the investigation, the OAG's enquiries concentrated on clarifying the suspicions relating to the laundering of the sums diverted from Russia through bank accounts in Switzerland. The OAG's investigations have in particular necessitated the disclosure of information on a large number of bank accounts in Switzerland, the filing of several requests and supplementary requests for mutual assistance abroad, i.e. in Moldova, Lithuania, Russia (the country in which the predicate offence was committed), Cyprus and the USA, and the interview of a substantial number of persons in Switzerland and abroad.
The evidence thus obtained enabled the OAG, with the assistance of its financial specialists, to conduct an analysis of the financial transfers. Several reports have been prepared in this connection, the last dating from May 2021.
The circumstances surrounding the death of Sergei Magnitsky in Russia, and its political repercussions, including the "Magnitsky lists", are not therefore the object of the present proceedings, as the investigation of these matters falls outside the OAG's jurisdiction.
Closure of the case and forfeiture of more than CHF 4 million
Based on its extensive enquiries, the OAG can now confirm that the investigation has not revealed any evidence that would justify charges being bought against anyone in Switzerland; the decision has therefore been taken to close the proceedings in accordance with Article 319 paragraph 1 letter a of the Criminal Procedure Code (CrimPC).
Nevertheless, in view of the fact that a link has been established between some of the assets under seizure in Switzerland and the predicate offence committed in Russia, the OAG has ordered the forfeiture of assets and recognised a compensatory claim in favour of the Confederation. The total sum involved is equivalent to more than CHF 4 million.
As an independent prosecution authority, the OAG has a legal responsibility to seek the truth, regardless of whether the evidence is incriminatory or exculpatory. In money laundering cases, a link between the sums suspected of being laundered in Switzerland and a predicate offence, a felony, generally committed abroad, must be established with a sufficient degree of certainty.
Review of Hermitage's status as a complainant
As part of the proceedings, Hermitage was recognised as a complainant in 2011. However, in the course of the investigation other parties to the proceedings cast doubt on Hermitage's status as a complainant.
In reaching its decision to close proceedings, the OAG therefore re-examined the question of Hermitage's status as a complainant. It concluded that despite extensive enquiries, it had not been possible to demonstrate that the funds under investigation in Switzerland originated from an offence committed to Hermitage's detriment. The OAG has therefore decided to revoke Hermitage's status as a complainant.
Appeal deadlines
The OAG has indicated that the parties have ten days if they wish file an appeal against its order of 21.07.2021 with the Federal Criminal Court. As the appeal deadline has not yet expired, the order has yet to take effect and is therefore not available for consultation.
Address for enquiries
Communication Service, Office of the Attorney General of Switzerland, info@ba.admin.ch
Publisher
Office of the Attorney General of Switzerland
http://www.ba.admin.ch/
