New Swiss law allows easy reopening of black money cases

The firm of Swiss Attorney-at-Law François Micheli represented Pakistan in high-profile Swiss corruption cases from 1997 until March 2008 when under the infamous National Reconciliation Order (NRO), all the charges were dropped, paving the way for Benazir’s return to Pakistan after years of exile abroad.

In an exclusive interview with The News over telephone from Geneva, François Micheli explained that Switzerland has enacted in 2011 a new federal legislation for the return of ill-gotten wealth. “The purpose of this legislation is to return identified assets to the damaged State despite the fact that the damaged State, for internal reasons, is not in a position to finalise the penal proceedings against the offenders and issue a confiscation decision regarding their ill-gotten wealth.”

This new Swiss legislation provides for a mechanism whereby the Swiss government can return the assets to the requesting State — Pakistan, in this case — despite the lack of satisfactory progress in that country’s penal proceedings, said Micheli.

The SC has taken a courageous step to restore the rule of law in Pakistan, said Micheli about the conviction and disqualification of Gilani.

He said Gilani was prime minister when the NRO was declared unconstitutional and it is during Gilani’s tenure that Pakistan took no earnest measure to reactivate the proceedings in Switzerland. 

Micheli said the Supreme Court decision on the NRO, Gilani’s conviction in April 2012, and his disqualification from office raise a serious concern about the validity of Pakistan’s withdrawal from the Swiss proceedings.

“This withdrawal may be flawed as it was not made in accordance with the Constitution and the law,” he stated. 

The decisions of the Supreme Court of Pakistan regarding the NRO, and the dealings of Gilani confirm that the withdrawals of 2008 and the refusal to reinstate the concerned proceedings were not made in good faith and that Gilani is, in this matter, acting in the interests of specific persons rather than in those of his country. 

He said in the wake of post-Gilani situation, Pakistan had two more options with respect to the money, which had been frozen in Swiss banks, in addition to the 2011 Swiss law. He said Pakistan could conceivably ask the Swiss authorities to reactivate their own penal cases, particularly regarding the money laundering acts committed after Pakistan withdrew from the Swiss penal proceedings.

The third option, he said, would be to reactivate the mutual legal assistance proceedings, which have been “unduly withdrawn”. He said he has reason to believe that the Swiss ambassador in Islamabad had informed the Swiss Federal Department of Foreign Affairs in Bern in detail about the various developments in the Gilani case. “What they are waiting for is that Pakistan expresses its serious wish that the proceedings for mutual legal assistance be reinitiated.”

Micheli elaborated that in mutual legal assistance option, the normal course of proceedings is followed where Pakistan would initiate a penal investigation; Switzerland would freeze assets and supply Pakistan with the evidence it requires. Pakistan would finalise its penal proceedings, sentence the offenders and confiscate their ill-gotten wealth; Switzerland would then transfer the concerned assets to Pakistan.

He said this procedure was near conclusion when the Lahore High Court in 1999 sentenced late Benazir Bhutto and her husband. But in 2001, these condemnations were overturned and over the past 11 years, Pakistan has unfortunately not been able to again render confiscation decisions.

As to what happened to the money frozen in Switzerland, he said he was officially not aware whether these funds had been removed after March 2008. “But if these moneys have been moved, which is not unlikely, then that is another money laundering offence, which is definitely not time-barred.”

“My suggestion to Pakistan would be to reinitiate the Mutual Legal Assistance proceedings and show to the Swiss authorities that they are determined to bring the old cases to a logical conclusion. 60 million USD is not a small amount. This money should go to Pakistan’s national exchequer,” he suggested. 

“It is difficult to grasp why Pakistani competent authorities have not taken any serious measure to recover these moneys for the purpose of the inhabitants of Pakistan since the NRO was declared void,” wondered the Swiss lawyer, adding that the paper trail evidencing the origin and intents is all there on record.

He said that the SC has taken a courageous step to restore the rule of law in Pakistan but added that any new prime minister will have to face the same question of writing to the Swiss authorities.