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Switzerland: Parliament rejects call to return 1MDB profits to Malaysia

Switzerland: Parliament rejects call to return 1MDB profits to Malaysia

Switzerland Parliament made a tough decision to reject a call to return 1MDB profits to Malaysia. The Swiss campaign led by centre-left politician Carlo Sommaruga and NGOs wanted to hand back more than $100 million money forfeited by Swiss banks in the 1MDB case.

In Switzerland, Foreign Minister Ignazio Cassis told lawmakers the measure was too broad and violated the separation of powers between the government and the courts. According to Mr Cassis, the current law allows repatriation of assets seized from toppled regimes. He added as well that an accord signed with the World Bank in December under which Switzerland would return to Nigeria about $321 million in assets seized from the family of former military ruler Sani Abacha.

Confiscated bank profits from dubious deals are a different story. Normally they flow into the general budget of Switzerland. A total of $4.5 billion was misappropriated by high-level officials of the fund and their associates, according to civil lawsuits filed by the U.S. Department of Justice. However, that multilateral financial knot is not a surprise for Swiss financial experts.

1MDB scandal: Switzerland, the United States and Singapore

The scandal has triggered money-laundering probes in at least six countries, including Switzerland, the United States and Singapore. Malaysian Prime Minister Najib Razak set up 1MDB in 2009 and previously served as chairman of its advisory board. He and the fund have denied any wrongdoing.

FINMA has confiscated 104 million Swiss francs ($110 million) in illicit profits from 1MDB-related deals by banks BSI, Falcon Private Bank and Coutts & Co since mid-2016. The BSI and Falcon cases are still under appeal.

1MDB said on Wednesday the 104 million francs is being claimed by banks whom FINMA targeted for alleged breach of Swiss laws:

“It cannot be claimed by 1MDB or the government of Malaysia as the money does not belong to 1MDB.”