Switzerland examines Lebanese legal assistance request over transferred funds, Swiss Ambassador tells Annahar

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“This request [sent in January 2020] is currently being examined by the competent authority, the Federal Office of Justice,” Monika Schmutz told Annahar.

by Georgi Azar -Source: Annahar

A file photo of Swiss Ambassador to Lebanon Monika Schmutz (HO)

BEIRUT: As accusations of politicians and bank owners transferring their money abroad under bizarre circumstances gained traction, the Swiss Ambassador to Lebanon confirmed to Annahar that Switzerland has received a request for mutual legal assistance issued by the Lebanese authorities.

“This request [sent in January 2020] is currently being examined by the competent authority, the Federal Office of Justice,” Monika Schmutz told Annahar. A mutual legal assistance treaty (MLAT) is an agreement between two or more countries for the purpose of gathering and exchanging information in an effort to enforce public or criminal laws.

On Wednesday, Speaker Nabih Berri confirmed that five Lebanese bank owners managed to transfer their “personal money” abroad, estimated at $2.3 billion, despite the informal banking restrictions that have been imposed on depositors since November.

This follows the accusations of a renowned Lebanese economist who alleged that nine politicians also wired the majority of their wealth to Switzerland in a span of two weeks in December 2019.

 

Last month, Dr. Marwan Iskandar argued that information he obtained from a Swiss journalist revealed the transfer of $2 billion to the banking and finance hub.

In response, Iskandar gave his testimony to Lebanese authorities, prompting the judiciary to launch an investigation into the allegations with media reports indicating that State Prosecutor Ghassan Ouweidat sought assistance from Switzerland.

Schmutz stopped short from confirming the existence of such evidence at the moment, telling Annahar that “it has no indication that large sums of money were transferred from Lebanon to Swiss banks in December 2019. We cannot confirm the allegations stated in Lebanese media, that a Swiss official or a Swiss journalist has such evidence,” she added.

Given the lack of formal capital controls, restrictions placed by government authorities on the flow of capital, any transfer abroad remains legal. Yet the issue lies in the preferential treatment showed to Lebanese higher-ups, with ordinary Lebanese having to foot the bill for the dollar liquidity crisis.

Banks have imposed informal capital controls since nationwide erupted in mid-October, limiting dollar withdrawals and almost completely barring transfers abroad. As the crisis escalates, Lebanon’s Central Bank is expected to introduce official capital controls, sources told Annahar, limiting monthly Lebanese lira withdrawals to 25 million while capping dollar transfers abroad to 50,000 per year in certain cases.

Another facet of the accusations lies in the origin of these funds and whether they stem from the state’s treasury.

Lebanese protestors and activists have long accused the ruling political class of illegal enrichment, with Lebanon ranking as the 43rd most corrupt country worldwide with a score of 28 over 100 according to Transparency International.

Looting of public funds, coupled with gross mismanagement, has depleted the state’s coffers and led to massive public debt now estimated at 160 percent of GDP.

This week, a group of Lebanese activists sent a letter to Swiss authorities, asking them to investigate and freeze Lebanese politician’s money in Switzerland.

“On Wednesday, January 29th, protestors gathered in front of the Swiss Embassy demanding to investigate, lift the bank secrecy, freeze and recover the public funds that were stolen,” the letter read.

Schmutz extended her appreciation to the protesters, saying that the “Swiss authorities understand the concerns of the Lebanese people about the allegations that illicitly acquired funds might have been transferred from Lebanon to Switzerland.”

“Switzerland has an established policy on freezing, confiscating and returning illicitly acquired assets through Mutual Legal Assistance,” Schmutz said, adding that it can act on the basis of a respective request for mutual legal assistance if the necessary prerequisites are given.

“In particular, it is vital that the Lebanese authorities provide concrete indications to the Swiss authorities relating to the presumed unlawful origin of assets and indicate where these assets have been deposited in Switzerland,” she said.

Without Lebanese authorities doing their due diligence, their Swiss counterparts can do little to nothing, Schmutz said.

Paula Naoufal contributed to this report.

 

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