Swiss prosecutors have closed a decade-long investigation into the money-laundering scandal exposed by Russian lawyer Sergei Magnitsky, the latest in a string of setbacks in the country's efforts to tackle financial crime.
The decision to end the probe without any charges being brought was a "stain on Switzerland", said investor Bill Browder, Magnitsky's former employer and a campaigner against Russian kleptocracy.
Magnitsky died in 2009 after being tortured and mistreated in a Russian jail, where he had been sent after Russian officials accused him of colluding with Mr Browder to defraud the Russian state.
Mr Browder's fund, Hermitage Capital, was for years the largest foreign investor in Russia. It was in fact the victim of a fraud, in which Russian officials siphoned off $230 million using faked tax documentation, later accusing the fund itself to cover their tracks.
Laundered
Switzerland was one of the key conduits through which the Russian officials were thought to have laundered the money. About $24 million (€20.3 million) linked to the fraud is still frozen in accounts at Credit Suisse and UBS.
The collapse of the case comes amid accusations of bribery and political meddling at the highest levels of the Swiss federal prosecutor’s office.
A senior Swiss official was last summer found guilty by the Swiss federal criminal court of accepting extravagant gifts from Russian legal officials, including a Siberian bear-hunting trip, during which he discussed sensitive matters concerning the Magnitsky case.
Michael Lauber, the federal prosecutor, was forced to resign last year in the face of impeachment proceedings by Swiss parliamentarians. His successor has yet to be appointed.
Yet the collapse of the investigation into the Magnitsky money trail has been anticipated for some time: the probe has dragged on for years without progress.
Anti-corruption
Magnitsky’s name has become a byword for western anti-corruption efforts. So called “Magnitsky laws”, which empower governments to act against foreign officials they suspect of human rights abuses, have come into force in the US, UK and European Union.
The Russian government and its officials have been a particular target of such legislation. The US Magnitsky Act was used to impose measures against several high-profile Kremlin officials following the Russian invasion of Ukraine.
Russian security agencies have in turn repeatedly targeted Browder and his associates, while Russia’s federal prosecutor has sought to use its influence abroad to thwart investigations into the Hermitage fraud.
Announcing its decision on Tuesday, the Swiss federal prosecutor said: “Based on its extensive inquiries, [the federal prosecutor] can now confirm that the investigation has not revealed any evidence that would justify charges being bought against anyone in Switzerland.
Forfeiture
“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 [federal prosecutor] has ordered the forfeiture of assets and recognised a compensatory claim in favour of the [Swiss government]. The total sum involved is equivalent to more than four million Swiss francs (€3.7 million).”
The Swiss federal prosecutor last year informed Mr Browder that it intended to share sensitive information he had provided with the Russian authorities, sparking an international outcry and raising questions about Switzerland’s commitment to the rule of law.
Mr Browder told the Financial Times that the closure of the Magnitsky case, “without any prosecutions and the return of the lion’s share of the dirty money, is in direct conflict with the decisions taken by the US, UK, Canadian and various European governments on the same facts.
“This is a stain on Switzerland. We plan to appeal this decision and raise the issue at a political level about the integrity and capability of the Swiss prosecutor’s office.” – Copyright The Financial Times Limited 2021
