Abacha funds: catastrophic repatriation by Swiss authorities
Zurich, 19 April 2002
In October 2014, the Geneva public prosecutor approved the out of court settlement between Nigeria and the Abacha family in utmost secrecy. More than a billion dollars that had been blocked in Liechtenstein, Luxembourg, Jersey, France and the UK, were then released for repatriation. Of this total, 380 million USD have been cleared for restitution to Nigeria by Geneva authorities. This repatriation is in stark contradiction to the official Swiss practice, a practice which, ironically, only became established in the aftermath of former episodes in the never-ending Abacha affair*. According to the press statement issued by the public prosecutor, the restitution "is going to be the object of a monitoring by the World Bank, according to modalities that have to be established". Whatever these are, it would have been crucial to determine how the funds were to be applied in advance. Only a transparent process including the Nigerian civil society can ensure that they indeed benefit the population.
The agreement is also a tragic triumph of impunity. Law enforcement authorities have shut down a long-standing process without holding those responsible for the massive looting accountable. This is all the more troubling because many of the banks involved have not been convicted of money laundering. It is equally incomprehensible that the Swiss lawyers involved may pocket up to 7 percent of the sum for their services, as this money belongs to the Nigerian population.
The willingness to accept such an agreement demonstrates once again the difficulty Swiss law enforcement agencies have in proving beyond doubt the illegality of funds stolen by politically exposed persons. That is why the Berne Declaration has for a long time called for a reversal of the burden of proof that would enable the Swiss authorities to seize the funds of politically exposed persons from notoriously corrupt states the moment such persons are unable to demonstrate the legal origin of those funds. This is already the case today with respect to criminal organisations. Switzerland happily prides itself on being a pioneer in the repatriation of stolen assets, yet has still not learned this important lesson from the past.
For more information (in French) click here or call:
Olivier Longchamp, Berne Declaration, +41 (0)21 620 03 09, longchamp(at)ladb.ch
* The Abacha affair was the turning point in the past decade in Switzerland's dealing with the funds from politically exposed persons. Following 1999, when a third of the funds stolen by Abacha – 700 million USD – had been blocked on accounts at 19 Swiss banks, it became clear that the Money Laundering Act was not sufficient to keep dictators from the Swiss financial hub. Likewise, it soon became apparent that Switzerland had no effective strategy to return the defrauded funds back to the population. The return of 505 million USD took place in 2005 without clear guidelines. Nevertheless both countries agreed to subsequent monitoring by the World Bank, and a Swiss-Nigerian NGO coalition also conducted its own investigation. Both came to the same conclusion: almost half of the returned funds were attributed to development projects of dubious benefit or simply slipped away somewhere.