Switzerland: A haven for Russian money? | DW Documentary

[Music] February 2022 Horror in Ukraine war has returned to European soil the reaction is immediate less than 24 hours after the invasion sanctions are imposed on Russia the oligarchs announcing new sanctions today against some of Russia's wealthiest business Elites now the world is targeting the Billionaire's extravagant Yachts an unprecedented level of sanctions are leveled at economic heavyweight Russia Putin is the aggressor Putin chose this war and now he and his country will bear the consequences [Music] one by one billionaires close to Putin are being tracked down their yachts and jets confiscated and their money Frozen but for the plan to work the money must be completely Frozen the slightest crack and it could all collapse do you want to be the country that is is that that can be used to circumvent those those sanctions is Switzerland this crack this loophole is the Alpine Nation doing enough to freeze Russian assets criticism has been growing louder since the start of the war when they adopted the sanctions they took it easy and did the minimum just enough to avoid criticism there have always been Black Sheep and dishonest people who have forged papers or issued false certificates but these are isolated cases are the sanctions really being ignored in Switzerland or are the accusations false we investigated and thanks to an unprecedented data leak we able to find out more about the billions managed on behalf of Russians in Switzerland [Applause] [Music] in the beginning the sanctions meant seizures Yachts worth millions were stranded in Harbors but could this end a war lawyer and asset manager DJ bodka says the measures are purely symbolic a yacht is something very ostentatious such a huge environmentally destructive machine captures people's imaginations everyone thinks great we've confiscated a boat but it's the start of a nightmare the ship is in Port with a crew of 30 that must be maintained by the state that seized it to make a difference you have to Target the assets the finance behind the war but freezing Russian billions is much more complicated than confiscating a few Yachts the oligarchs love affair with Switzerland is well known and it didn't start yesterday two examples Victor vexel with estimated assets of 7 billion US he's one of the main shareholders of the early con group and has avoided sanctions in United States second is Gennady timchenko who was co-founder of the gunvor oil company his Villa on Lake Geneva was confiscated by the Swiss before the sanctions Switzerland had been very attractive to [Music] Russians the image of Switzerland everything is fabulous exceptional on every level a very beautiful country hospitable especially to those who have money stability and neutrality what more could we wish for when the SSR collapse Switzerland was an excellent place to open accounts and the oligarchs understood this very quickly and began to use Switzerland as a hub for their business especially Financial business in the beginning they were happily welcomed the laws were different the banks were less squeamish they trusted the Swiss and they wanted to copy the rich westerners that's why they wanted to buy beautiful Villas airplanes yachts and collections to emulate Western billionaires the timchenko family has been in Geneva since the early 2000s a stroke of luck for the [Music] Swiss gened timchenko is a son of a member of the army he has a villa in col a very exclusive community in the Canton of Geneva and he is also generous to the Nava Foundation at a classical music festival in the and bodmer Foundation they also support the hockey club svet these are the timchenko family's main activities in Geneva but that all ended with the start of the war Gennady timchenko has left Switzerland and his accounts have been frozen as have those of about a hundred other oligarchs not all of them are close close to Putin but on February 24th the day of the Russian invasion their fate changed about three dozen people had gathered in the Kremlin Vladimir Putin basically told them what he had said on television a few hours earlier they were speechless very surprised certainly not pleasantly they were completely dumbfounded some were shocked when Vladimir Putin called the meeting on the 24th knew full well that they would all be affected by Western sanctions looking back we can now say that Putin gave them a poison gift over the months the list of sanctions has grown longer and longer who ends up on it and why that's not decided in Switzerland but in [Music] Brussels we meet Belgian Didier reers once the EU commissioner for justice and the rule of law he had been pursuing Russian assets since the beginning of the war with one goal if we want to stop the financing of the war we must not only act very quickly but also hit very hard you have to hit those who are directly involved in financing the war the oligarchs and a whole range of entities but above all the Russian economy and the Russian military these sanctions are not the only ones I'm concerned with the freezing of oligarchs and organizations assets but also sanctions targeting specific sectors with export and import bands on Russian products they aim to hit the economy and the activities of the Russian military industry at its heart the goal is to exert pressure to end the war for neutral Switzerland it wasn't easy to accept the sanctions imposed by Brussels according to D reinder 4 days of uncertainty and secret negotiations were needed to prevent Switzerland from becoming the weak Link in Europe it is completely normal for an independent state not to Simply copy European sanctions the biggest risk was that the implementation would be severely delayed but fortunately that didn't happen despite everything Switzerland imposed the sanctions quickly the Second Challenge was to prevent many players such as lawyers notaries and Banks from helping circumvent the sanctions having a legal text a nice piece of paper is not enough you have to make sure the paper is effective [Applause] the criticism is diplomatic but reasonable sanctions have been circumvented since the outbreak of the [Music] war February 2022 a Swiss asset manager was stopped before he could fly off in a private jet with €500,000 in cash for a Russian client in April 2023 a Swiss company imported $44 million of Russian gold via Dubai a loophole in the sanctions are these isolated cases we took a closer look with the help of two colleagues more familiar with the financial [Applause] world we started with the data leak spotted on the darket in February 2023 Russian hackers briefly put thousands of highly sensitive emails and Bank documents online this data didn't originate in a bank but rather a company that manages billions and is based in the heart of Zurich it's name PHA Port official sponsor of the T Open tennis tournament [Applause] [Music] to see all these chances Without Limits fport is a mix of old traditional Swiss banking and uh very modern and transparent technology I see it as an instrument to open a door to many banks to many solutions for the customer we have access to markets both private and public that very few companies in this world would have it also offers its services directly in Russia very common by [Music] pH we were rated as heavyweight Russian clients and a company that works with all the major banks in Switzerland this data is very interesting but the flood of information is too much for us we traveled to Germany to meet two expert s on data [Music] leaks journalists Frederick ubaya and basan obaya work in Munich and wrote a Pulitzer prizewinning book on the Panama [Music] papers a dozen employees will help them analyze the mountain aort data over the coming months they will be assisted by journalists from France Germany and Switzerland we haven't heard of f p before and that's actually what makes it so interesting for us because it seems like finina Port is a much smaller company than the many well-known companies and for fport it seems like they are a little bit like flying under the radar and not under as much watch as the big players in Switzerland so it seems like they might be dealing with customers that the big guys the big players do not want to touch anymore because they are under too much um surveillance the leak is 1.2 terab of data we see a lot of Mals and and documents and banking data so even if the hacker group is um really bad and aggressive and it looks like that right um still if there's information that the public needs to know we're going to publish it the First Step matching the names of sanctioned individuals with phop port's Client List but no matches are found the rules are being followed no assets from oligarchs subject to sanctions are managed by the Zurich based company but we did discover Russian money directly linked to the financing of the war the data includes family members of One one man Alexander pomaro head of a state-owned company called mvu Canal which specializes in wastewater treatment this senior official is a close friend of the deputy mayor of Moscow people close to him have been awarded numerous lucrative public contracts worth more than €50 million the uh value of the contracts are way too high and this could explain why the family is so wealthy the daughter and the girlfriend and um both have the largest Accounts at fport the research team in Munich Unearthed just how the Pam Moreno Family was able to sneak their money now managed by phop Port back to Europe it's complicated but more than 46 million was in the family's Swiss Accounts at the end of 2022 no sanctions were imposed on Pon Moreno's daughter and [Music] mistress but the origin of the money raises [Music] questions that should be a red sign right you have millions of US Dollars and you have someone working at a state company um you have money leaving Russia and that guy directing a St on company and his relatives um with full pockets they didn't see the problem or they decided to just look the other way the problem is that Alexander peno's company is not only active in the Wastewater sector maso Canal is also active in occupied Ukrainian territories we found the company offering its employees Financial incentives to fight in Ukraine on VC contacted a social media Network hundreds of men and Equipment have been sent to the front according to this video published by the [Music] company phop Port declined our requests for interviews we were told in writing that new discoveries often lead to investigations against its customers but there are more surprises back in Switzerland our team of journalists discovered an email sent just a week after the attack on Ukraine two Russian customers wanted to store 40 gold bars worth a total of 5.6 million in a safe deposit box at saffra sarene Bank in Zurich phop port's managers considered this transaction to be clumsy and alerted the [Music] authorities the customer could be accused of attempting to circumvent sanctions they wrote nevertheless phop Port approved the transaction and the Bars were transferred when asked the bank said the customers have European Union residence permits and are not subject to sanctions we cannot refuse this type of transaction as the gold belongs to third parties we are bound by confidentiality and a breach would have criminal consequences no current or former customers are affected by the sanctions is Switzerland helping track down Russian billions for Scott Miller the American ambassador in ban the answer is clearly no he's a former banker and was the first to denounce Switzerland's LAX attitude in some cases 10 15 years ago I imagine that we probably have a lot of work to do together to continue to identify uh uh trusts and companies and and other entities that have been established to hide the beneficial uh ownership interest of some of these assets [Music] words are followed by Deeds April 2023 a sharp letter signed by all G7 ambassadors and the European Union was sent to the federal Council a diplomatic slap in the face we also have concern that law enforcement officials are blocked from investigating illicit Financial structures produced by attorneys serving as Financial intermediaries we call on the Swiss government to take further steps we share a concern that these loopholes could harm Switzerland's reputation and uh you're brave people in Ukraine the state Secretariat for economic Affairs then announced the opening of 30 criminal proceedings for possible circumvention of sanctions in Switzerland for its director Helen buer artia a former former Ambassador the accusations were unjustified the form wasn't the best we had to read in the newspapers that we would receive a diplomatic letter we found it difficult to understand we are given certain explanations and told that Switzerland must do better but people forget that we are dealing with individuals who have enormous resources at their disposal just as we check a private jet that could possibly be linked to a person on a sanctions list we are immediately contacted by a law firm who goes on and on about why this is not the case that the jet belongs to company XY and not to Mr X or Mrs y it really is almost detective work Witnesses here the pressure increased in July 2023 when a US Senate committee took up the issue the focus of the hearing Switzerland's alleged failings we have seen uh the Russian economy surviving better than we thought it would and part of that has been the laundering of dirty money in Switzerland a global conflict between dictator the testimony of Bill Browder got the ball rolling Browder a British national used to invest in Russia but is now an activist the Swiss are allowing the Russians to have access to that money to kill ukrainians and we should do something to shut that down and if the Swiss aren't willing to do it voluntarily then we should put pressure on them they weren't willing to give the Nazi gold back to the Jewish people until Congress got involved and Congress has power here and the Swiss respect that and sometimes when people don't behave themselves um we need to give them an incentive to behave themselves and that's why I think we're all here and that's where you can play a role thank you but are these accusations Justified let's look at the figures Switzerland has frozen about 7.5 billion Franks and 17 Villas not bad compared to the 9 billion Frozen by the USA and the 24 billion Frozen by the EU however given the total amount of Russian assets deposited in Switzerland which is estimated at 150 billion the seizures are laughable this figure is what has sparked controversy and attracted the eye of the Americans where did the estimate come from and why wasn't more Russian money Frozen to understand you have to go to [Music] Zurich we met with the Swiss Bankers Association an umbrella organization representing more than 260 member banks the association was the first to calculate the value of Russian [Music] deposits in March 2022 the state Secretariat for economic Affairs SEO had not yet collected any data we made an estimate our estimate of 150 billion was based on all crossb assets of Russian clients that are booked with Swiss banks these are all Russian clients with a Russian passport or other nationalities like another passport or several passports regardless of whether they live in Switzerland or Russia on the otherand used different data it only includes Russian citizens with a corresponding Russian passport and does not include corresponding Assets in the custody account we included this and estim 150 billion that's the big difference a simple difference in calculation but when it comes to freezing assets the organization said it's hard to do more the banks are strictly complying with the sanctions and will continue to do so the sanctions aren't over yet and are largely being continued and the corresponding sanctions at banks have been implemented accordingly the bankers who quoted this figure calculated all the Russian assets but you have to bear in mind that not all Russians are criminals and not all Russians are on the list honest people also have money in Switzerland and that might be where the misunderstanding comes from people have talked about sums of 100 billion 150 billion even if we do excellent work we will never reach those numbers and sure some are disappointed and think that we haven't done our job but I also find that a little frustrating frustrating but for some just the tip of the iceberg Swiss politician Baptist horney knows the situation well he's a lawyer and member of the legal Affairs committee and is angered by the lack of controls I am not at all saying that the people who work for the state Secretariat for economic Affairs are incompetent they do their job very well but the Secretariat lacks a whole range of skills that are not part of their jobs the neighboring countries in the USA have now set up task to bring together staff from similar authorities from private Banks or people who specialize in Commodities trading and so on with all that concentrated expertise you can uncover the complex structures that make it possible to circumvent sanctions it's about stopping the flow of money to Russia to finance the war I think we could show a bit more [Music] Goodwill lack of will or lack of control one thing is certain to end the war and rebuild Ukraine the United States and Europe are searching for every last billion from Russia the list of sanctions could become even longer Switzerland is under pressure because for years it has had a reputation for hoarding illegal money from Russia in 2000 Banks said they were putting the past behind them no more scandals but as our research continued an entirely different picture emerged [Music] two PHA Port customers caught our attention the first a heavyweight in Russian politics Leon Ryman former minister of telecommunications and adviser to the president from 2008 to 2010 in this photo you can see him from behind standing opposite the former German Chancellor he was just then becoming a client of phena port and over 30 million Eur ended up in his Zurich accounts but in 2006 a Zurich Court found Ryon guilty of money laundering and personal [Music] enrichment we are talking about someone who has been part of the Russian kleptocracy for years who was very close to Vladimir Putin and was involved in a number of scandals reported in the media you can't ask a financial authority to know something that nobody knows in this case you didn't have to look far to understand that this is a highly problematic person you actually treat this client like a normal client even though all the information points to the opposite the former Russian Minister was a client OFA Port until at least the end of 2021 the company denies any wrongdoing and said it is investigates its clients backgrounds and the origin of the assets it manages the second problematic client is a multi-millionaire who was convicted of fraud in Russia in 2019 for essling assets from an insurance company he is on the international list of wanted persons but this Russian still managed to open several accounts in Switzerland under two different names and identities the case of is particularly interesting because he's wanted by the Judiciary in Russia and several lawsuits have already been brought against him for fraud particularly in the insurance sector the amounts involved are also striking a total of almost 45 million flowed into accounts bya phop Port which raises the question of whether phop Port should have warned Swiss we showed these cases to a former employee of track the French financial intelligence unit for security reasons he asked to be made unrecognizable but his reaction is very clear it's not illegal to have two passports but two passports with two names is that raises questions a normally diligent expert should not have let that pass you can't treat this as a situation for standard procedure especially since we're not talking about amounts of a few thousand EUR here you have to be extremely careful based on these documents I think that in each of these cases the authorities should have been alerted clients should have been asked much more detailed questions about the origin of the funds and they should not have been satisfied with verbal explanations from the clients but demanded reporting documents yes even an asset manager should have become suspicious based on the documents you've provided none of the Russian customers we came across during our research wanted to comment in an email fport told us it is the customer's decision under which legal name they wish to open their bank accounts and claimed to have no knowledge of cases in which customers have declared different nationalities to Banks or authorities the company added that the person in question is no longer a client and that phop Port cannot open a bank account and only provides Financial advice but the company's role went far beyond that March 2022 shortly after the start of the sanctions fport sent this email to a Russian customer with options for obtaining a residence permit or passport at short notice the estimated cost from 7,000 Swiss Franks for Hungary to 150,000 for the Caribbean island of Granada in plain language the cost to circumvent sanctions the sanctions do not apply if a Russian citizen is resident in Switzerland or has another European citizenship this is one way of circumventing sanctions we managed to ensure that no more passports have been issued since the outbreak of the War this applies to Cyprus but Malta also decided to stop all procedures for Russian and belarussian citizens but that's not enough we have to ask ourselves whether what was done in the past is a problem whether it is appropriate to question the passports that were issued in the past and then we can also look at other groups there are many people with dual citizenship and measures may also need to be taken there on this point phop Port explained it is not uncommon for client to be interested in relocating to other countries phop Port then refers them to specialized companies or provides them with appropriate advice but is this common behavior for asset managers we looked for answers here too the profession has its major annual meeting just outside of ban at the intell and Congress Center 300 asset and Trust managers met the the event included discussions about new regulations yachts and big money with experts from all over Switzerland we were not allowed inside with our camera but one of the organizers a trust administrator from Geneva was willing to answer our [Music] questions how did it work with the Russian families you had to clarify simple things like residence permits and citizenships coordinate with other professionals such as banking experts lawyers and asset managers to understand what leeway there was especially at the beginning the difficulty of course is keeping up to date and complying with constantly changing rules it's not easy to find out more but one woman agreed to talk openly with us about another side of her profession cive weier doesn't manage bank accounts she manages Villas Yachts private jets art Collections and she knows all the ins and outs When The War Began there were many questions what do we do now what happens there was actually a bit of panic the task was to interpret newly imposed regulations you know about the lists you know you have to be careful but our job is always to find Solutions because today it's War yesterday it was Co the day before yesterday it was the Americans and we don't know what tomorrow will bring but we always have to try to find Solutions and stick to the rules above all we look for people who can confirm that the solution is a good one but that's not always easy ce's clients had residences in Monaco and often had several [Music] passports some financial advisers will always have good ideas for adapting and slipping through the cracks of sanctions the US Treasury Department has begun sanctioning Swiss Financial experts who find solutions to hide money Russells is also thinking about cracking [Music] down someone who circumvents or attempts to circumvent sanctions is committing a crime their assets can no longer just be frozen they can be confiscated that is very important the property can become state property and the money can be directed to Ukraine we try to take this approach not only in relation to Russian oligarchs or Russian organizations but also try to involve legal and tax advisors lawyers notaries and Banks if they are involved in strategies to circumvent sanctions if this can be proven it can lead to criminal convictions and confiscations and we call on the Swiss Confederation to move in the same direction and ensure that it not only looks at whether there are people who are subject to sanctions and whose can be blocked but also whether there are attempts to circumvent sanctions in plain language Switzerland should roll up its sleeves and better control the activities of all those who may be working to keep Russian money Out Of Reach still sanctions against oligarchs and their Entourage have not been met with unanimous approval one man is fighting against what he calls the absurdity of sanctions Alam bonda is a lawyer in Geneva he rarely speaks to the media sanctions stand for four things in particular inefficiency Injustice illegality and idiocy firstly they are ineffective I remind you that there have been sanctions against Cuba for 60 years sanctions against Iran for 30 years sanctions against North Korea for 20 years there's Venezuela Belarus there are sanctions everywhere this is obviously not leading to the desired regime change secondly these sanctions are unjust who is affected it is the population people 95% of whom have nothing to do with the outbreak of war in Ukraine or in other countries ultimately these sanctions come back to us in the form of inflation and in the form of electricity prices that affect low-income households they are idiotic because they come back to affect he defends the richest people in Russia those referred to as oligarchs a term he finds problematic problem I have a problem with the term oligarch because it is not legally defined that is my problem it's not that I don't like the term it's that I don't understand what it means legally and if you don't have a definition you can't effectively defend yourself you can't make an argument because you don't know what you're being accused of what are they actually accusing you of having a fortune closeness to power what are being accused of and how is that defined the only way to break the sanctions is to go to court in the US this is Mission Impossible but in Switzerland and Europe he went to battle for one of his clients based in the Canon of [Music] Geneva his Villa wasn't extremely luxurious but his client had to leave in a hurry after being sanctioned hold up this is a sanction a Swiss sanction here you have a citizen who is defined as a Russian citizen the problem is that he has Swiss citizenship but that was not stated he has dual citizenship of Switzerland and Russia he was brought up in Switzerland he went to school in Switzerland he pays his taxes in Switzerland he is Swiss that is the first point is there second class citizenship in Switzerland the second point will he be officially notified is he informed of the imposition of sanctions in an official letter well no not at all you simply put his name on the Internet and how does he find out he finds out from his bank which has blocked his account he finds out from the press and his reputation is severely damaged from one day to the next you can no longer pay your bills you can no longer pay your children's tuition you can no longer use your credit card we don't even have a swisscom subscription anymore it's death and there's nothing you can do the third point is that it is written in English is English an official language the national languages are German French Italian and Roman but not English but what is your client actually accused of oh I'll tell you that he's the son of and yes it's in English wa I'm my Father's son too that's ridiculous the client's father has been personally honored by Vladimir [Music] Putin they say that the father must be a criminal he must be a war criminal but no what is the father accused of making pipelines and selling them to gazprom and rosn that's like accusing a locomotive manufacturer of selling his locomotives to SBB that's absurd he's not the one who decided to invade Ukraine really therefore the sanction against this Swiss citizen is null and void the sanction is invalid and you have to have the courage to admit that the Swiss Judiciary will have the final decision but the chances of success are slim we have international bodies that discuss each name and explain why we put that name on the list in fact you don't only have people who are directly linked to the Putin regime but it's always people whose's companies parents or investment funds are financing the regime in one way or another and then you will probably find one or two unjustly listed people on the whole list it's a crisis an emergency situation but in 99.9% of the cases it's not people who know Putin personally and go for a glass vodka with him obviously it's the owners of Russian assets that are invested in the war in Ukraine Alam biond is not in favor of War but he is convinced that sanctions destroy our rule of law until the question of whether his clients can be removed from the sanctions list has been clarified he has to ask permission from the state Secretariat for economic Affairs for every payment from the Frozen accounts which ties up the administration's resources and prevents it from carrying out investigations my team had to answer 20,000 inquiries in the form of emails and phone calls often on Deadline companies asking whether this or that deal was possible it was an exceptional situation but now unfortunately we are already in the second year of this terrible war and now we will certainly have the strength and more resources in time to carry out the investigation the state Secretariat is stepping up checks with additional staff the number of evasions uncovered in Switzerland could increase in the future a reminder for now we have yet to be informed of any proceedings against phop port [Music]

Channel: DW Documentary

Views: 392,654

Keywords: Documentary, DW documentary, full documentary, DW, documentary 2023, dw documentary, documentaries, Documentaries, documentary, Switzerland, Russia sanctions, Ukraine war, money laundering, oligarchs

Id: EMZSE189F8Q

Length: 42min 26sec (2546 seconds)

Published: Mon May 27 2024