Switzerland has for years been a primary destination for Russian money laundering and, since the Russian invasion of Ukraine, a weak link in Western sanctions enforcement. This Helsinki Commission hearing examined Switzerland’s poor track record of rooting out dirty Russian money and examined potential paths forward for U.S. policymakers in persuading Switzerland to uphold its commitments to its democratic partners.
Bill Browder, head of the Magnitsky Global Justice Campaign, outlined his own experiences with Swiss officials undermining investigations into the money laundering cases linked to Sergei Magnitsky’s discovery of over $230 million in tax fraud by Russian officials. Browder traced Swiss officials’ attempts to direct corruption by Russian money, stating that Switzerland “wants to be seen as doing something while in reality doing nothing” to continue profiting off of Russian assets. Since the Swiss legal and regulatory systems have both failed to show a commitment to effective oversight of Russian money, Browder asked commissioners and other government officials to consider targeted sanctions under the Magnitsky Act against Swiss officials involved in quashing the investigations in question, including the sitting Prosecutor General.
Drew Sullivan, co-founder and publisher of the Organized Crime and Corruption Reporting Project (OCCRP), testified that Swiss financial regulators prioritize the interests of the Swiss banking sector over true oversight and legal compliance, emphasizing that a fair audit of Swiss banks would show what his organization estimates is over $400 billion in illegal money, much of which is linked to Russia. Mr. Sullivan urged U.S. and EU policymakers to exercise their regulatory jurisdiction over dollar- and euro-denominated accounts to force Swiss banks into compliance with stronger transparency regulations. He views severe pressure from other democratic governments as the only way to ensure more responsible Swiss financial regulation.
Olena Tregub, secretary general of the Ukrainian civil society organization the Independent Defense Anti-Corruption Committee (NAKO), underlined Switzerland’s hypocritical narrative of neutrality given that Switzerland is the leading European country in terms of dual-use weapons components found in Russian arms. Additionally, Switzerland’s lax sanctions enforcement has allowed the country to become a safe haven for Russian money despite Switzerland nominally joining EU sanctions regimes against Russia. Tregub advocated for a U.S.-led multilateral working group, including Switzerland, to prevent the export of dual-use technologies to Russia as well as additional pressure on Switzerland to enforce European sanctions it has already agreed to.
Commissioners thanked witnesses for bringing visibility to Switzerland’s need for improvement in these areas and questioned them on what the most effective U.S. responses would be, as well as how likely they think their proposed solutions are to be implemented.