Swiss Authorities Go After Suspect Assets from Libya and Syria

May 22nd, 2012

flickr / marcokalmann

Officials in Switzerland have opened criminal proceedings against Libyan and Syrian citizens suspected of holding ill-gotten funds in Swiss bank accounts. Suspicious deposits in Swiss banks from the MENA region increased to record levels during the Arab Spring events of 2011, when wealthy citizens hoped to protect assets abroad. However, according to an anti-money laundering agency’s report, much of the laundered money came from top officials. Although the involved Swiss banks have frozen assets that allegedly belong to these officials, neither the agency nor the Swiss government is certain of the laundered money’s origin or sum.

Reuters’ Caroline Copley provides details:

The Swiss state prosecutor said on Sunday it had opened criminal proceedings against Syrian and Libyan citizens on suspicion of money laundering. 

Jeannette Balmer, a spokeswoman for the prosecutor, said Swiss authorities had received reports from the money laundering agency in connection with Libya and Syria, but could not give concrete details.

Keen to step up efforts to shake off its image as a haven for ill-gotten funds, Switzerland has enacted strict laws in recent years on money-laundering.

In the case of Syria, the investigation concerns assets presumed to belong to those close to Syrian President Bashar al-Assad deposited in banks in western Switzerland, the NZZ am Sonntag newspaper reported on Sunday.

It was unclear who and what sum of money was being investigated, nor whether accounts had been frozen, it said.

Questionable asset flows identified by Swiss authorities reached a record high of more than 3 billion Swiss francs ($3.21 billion) in 2011, lifted in part by wealthy North Africans who sought to move assets into the country as the Arab Spring raged.

Switzerland has frozen 50 million Swiss francs ($53 million) of funds belonging to Assad and other top officials. 

Global Financial Integrity’s Sarah Freitas has argued that capital outflows from Syria resulted from doubt in Bashar al-Assad’s ability to effectively govern. At the same time, al-Assad’s personal money laundering in Europe evidences the need for further regulation of tax havens. Indeed, lackluster policies against money laundering contribute to international instability, particularly in the transitioning Arab Spring nations.

Under the current level of tax haven accessibility, capital flight by corrupt rulers, terrorist financiers, and wealthy officials is both possible and inevitable. However, Switzerland’s ability to roughly pinpoint and freeze al-Assad’s assets shows the potential effect of money laundering regulation on the Syrian uprising.

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Written by Kyle Hunter

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