Wednesday, February 3, 2010

Haiti Funds to Remain Blocked, Embarrassment for Swiss Government

The Swiss cabinet says it will continue a freeze on the assets of former Haitian dictator “Baby Doc” Duvalier in Swiss accounts.

GENEVA (AP) - In an embarrassment to Switzerland's government, the country's top court said Wednesday that at least $4.6 million in Swiss bank accounts previously awarded to charities for Haiti must be returned to the family of Haiti's ex-dictator Jean-Claude "Baby Doc" Duvalier.

The decision was unrelated to the devastating earthquake that struck Haiti on Jan. 12, killing at least 150,000 people, but the amount of money contested could feed more than a million Haitians for two weeks.

The court's decision was reached hours before the quake but only published Wednesday, prompting the Swiss government to issue an emergency decree to keep the money frozen in a Swiss bank until a new law can be passed allowing it to be donated to aid groups working in Haiti.

"This is a public relations disaster for Switzerland," said Mark Pieth, a Swiss professor with a long resume in international corruption cases such as the U.N. oil-for-food scandal.

In the decision, the Federal Supreme Court reversed a lower court's ruling that the money should have gone to aid groups working in the impoverished nation because the statute of limitations on any crimes committed by the Duvalier clan would have expired in 2001.

Delays are common in Switzerland between court verdicts and their public announcements, but the release of the decision could not have come at a worse time. Beyond depriving Haiti's relief efforts of additional money, the ruling also strikes a blow at Switzerland's long-standing efforts to shed its image as an investment haven for the world's dictators.

"We assume that this money doesn't belong to the Duvalier family," said Eveline Widmer-Schlumpf, the Swiss justice minister. "We've blocked the money again today to prevent that it goes somewhere that it shouldn't for political reasons. We really hope that this money finally goes back to the country."

Many Haitians accuse Duvalier and his entourage of robbing millions from public funds before he was ousted in 1986. Duvalier is believed to be living in exile in France and has always denied wrongdoing.

The decision cannot be appealed, but the Swiss Foreign Ministry said it would try to keep the money from being withdrawn while it works on a better national law for dealing with assets of "criminal origin." It said the amount of money actually totaled $5.7 million, though the reason for the discrepancy was unclear.

The government "wants to avoid the Swiss financial center serving as a haven for illegally acquired assets," it said in a statement, adding that a new law working retroactively could be ready this month. Widmer-Schlumpf was less optimistic, but said the law could come into effect as early as 2011.

Switzerland has traditionally been a favorite location for potentate money because of its banking secrecy rules. But reforms over the last two decades have made it harder to hide money in Switzerland, and the country has become a world leader in returning cash.

Virtually all of about $730 million in Swiss accounts linked to the late Nigerian dictator Sani Abacha has been sent back to the African country, while the Philippines recouped hundreds of millions stashed in Swiss banks by late dictator Ferdinand Marcos.

Source: CanadianBusiness

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