Switzerland to share seat with Poland, pledges additional $10 billion to IMF
BERN, SWITZERLAND – Swiss President Eveline Widmer-Schlumpf and US Attorney General Eric Holder met on the fringes of a key International Monetary Fund (IMF) meeting in Washington 20-21 April. Bern’s statement was brief, noting that the two met “in order to discuss bilateral cooperation on tax issues. They agreed to pursue all available options to identify US taxpayers with undeclared accounts in Switzerland.” The US Department of Justice, which Holder heads, did not comment on the meeting.
The IMF received pledges of $430 billion in additional funds for what it calls a “reinforced anti-crisis firewall” from its member states, in an IMFC (Financial Committee) meeting of central bank governors and ministers 20-22 April. Switzerland pledged $10, noting that the “exceptional” boost is “due to the still fragile state of the world economy, [thus] the IMF ministerial committee decided to increase the IMF resources” and insisting that “the additional funds should be made available to the IMF only on a temporary basis.”
Poland and Switzerland to share part of Bretton Woods leadership
Poland and Switzerland, in a new Memorandum of Understanding signed during the Washington meetings, have agreed to Switzerland maintaining “overall leadership of the constituency in both the IMF and World Bank.” The constituency to which they refer is a group of eight IMF member countries that Switzerland has represented since 1992 on the 24-seat councils of the IMF and the World Bank, sister organizations in what are known as the Bretton Woods Institutions. “It will represent the constituency in the responsible ministerial bodies, for example, the IMFC and Development Committee, in which the political and strategic courses are set. However, Switzerland will share its seat on the IMF Executive Board–the IMF’s operating decision-making body–and in future both countries will nominate the executive director for a two-year period on an equal rotation basis.”
The clause concerning the executive director is dependent on the IMF implementing its governance reforms but Bern notes that no leadership changes will be made for the World Bank, where governance reform is not underway.
Regional trains, especially in border areas, suffered losses as tourism dropped when the franc climbed
BERN, SWITZERLAND – Four rail groups are receiving CHF21 million in aid from the Swiss government to offset some of the losses they suffered in 2011 due to the rapid increase in the value of the Swiss franc during the year.
All four provide transalpine shipping and use combined or piggyback cargo transport, carrying trucks to reduce the environmental impact on the Alps.
The government in 2011 set aside more than CHF28m in credit for which companies could apply, showing the losses directly linked to the currency’s sudden rise. Four presented their figures at the start of 2012 and will be helped out of the funds set aside: BLS Cargo, CFF Cargo International, Crossrail and TX Logistik.
Another CHF11.2m was distributed in December 2011 to a number of transport companies, mainly regional, which lost money because of a sharp fall in tourism due to the high franc.
BERN, SWITZERLAND – The Swiss government said Wednesday night 2 November that it condemns Israel for two new measures, voted by the Israeli cabinet Tuesday, shortly after Unesco admitted Palestine as a member.
Bern stopped short of calling the measures retaliatory, but it notes that the decision by Tel Aviv to “speed up construction of several thousand additional housing units in the settlements in and around East Jerusalem” is illegal and constitutes a violation of international law”.
The Swiss Federal Council also says that it is “preoccupied by the Israeli government’s announcement concerning a possible freeze on transferring funds to the Palestinian Authority. Such a decision would be contrary to Israel’s international obligations. Switzerland calls upon the Israeli authorities to continue to turn over the tax revenues collected in the name of the Palestinian Authority. These funds make up a significant part of the Palestinian Authority’s budget.”
Switzerland abstained from the Unesco vote on Palestine, but swissinfo cited a statement Monday night by Rodolphe Imhoof, Swiss permanent delegate to Unesco in Paris: “If Switzerland abstained in the voting, it’s because it believes that this debate should not be held in the context of an organisation whose role is a technical one, such as Unesco,.” Imhoof added that the matter was one for the political organs of the UN to decide.
The Israeli government has denied charges that the two cabinet decisions are retaliatory, but AFP quotes an unnamed Israeli official as saying the measures were a “punishment” for the vote.
GENEVA, SWITZERLAND – The Swiss Federal Tribunal has ordered a new trial for Abba Abacha, son of former Nigerian General Sani Abacha, who ruled the country for five years in the 1990s. He was suspected of stealing more than $2 billion and after his death his sons managed the money.
Abba Abacha was given a two-year suspended sentence in June 2010 by a Geneva court and his assets confiscated, under Switzerland’s programme covering stolen potentate funds. Nigeria had asked the Swiss government for judicial assistance in 1999 to recover the money.
The Swiss high court has ordered the new trial because Abacha was refused a visa and therefore could not attend the earlier trial in Geneva.
BERN, SWITZERLAND – The Swiss Secretariat for Economic Affairs confirmed to ATS and AP news agencies Sunday that the government has blocked more than CHF27 million in Syrian assets, although it has not confirmed if they belong to Bachar al-Assad, president. He and his brother are on a list of 23 persons whose assets were blocked earlier this year, with Swiss financial institutions required to report any assets to Bern.
The new figure, published by Zentralschweiz am Sonntag, brings to CHF1.2 billion the assets belonging to dictators and their entourages which have been frozen by Switzerland since January.
Update 12:50 Bern / Zurich, Switzerland (GenevaLunch) – The argument over who gets the Duvalier millions, some CHF5.8 million of them, will finally be heard in court, with the Swiss government 2 May initiating forfeiture proceedings at the Swiss Administrative High Court. The proceedings are the first under a Swiss law that went into effect in February 2011. The Haiti proceedings are also currently the only case requested by the federal government, spokesperson Roland Meier told GenevaLunch, but, he notes “the law was created to cover other cases” as needed.
The new law allows what are known as failed countries to ask for help without pressing criminal charges first, a lengthy, costly and often, as in the case of Haiti, near-impossible task.
If the government’s case for restitution is successful, “the Swiss Confederation will return the Duvalier assets to Haiti in accordance with the provisions of the new Federal Act on the Restitution of Unlawful Assets (RUAA).
The funds were frozen in 1986 shortly after Jean-Claude Duvalier fled Haiti, ending his family’s decades-long dictatorship. They have been continually frozen in Switzerland since then.
Amount that could go to Haiti probably more than CHF5.8 million
The forfeited assets should amount to somewhat more than CHF 5.8 million, according to the Federal Department of Finance (FDF), which announced the opening of proceedings.
The amount appears to have risen and fallen over the years, but Meier, spokesperson for the FDF, told GenevaLunch that it is not yet clear if this is because the funds were in dollars and the dollar has moved against the franc, or if the amount involved is only part of the original funds in question.
Duvalier said in February 2011 that the money belonged to his family’s foundation, and he mentioned a sum of CHF6.8 million. At that time the Swiss government spoke of $5.8m, not Swiss francs (background story, GenevaLunch). Asset Recovery, which has published an online history of the attempts to give the Duvalier funds to Haiti, mentions $4.8 million in 2009. Reuters notes today that the amount of which Duvalier has been accused of embezzling is between $300,000 and $800,000.
Duvalier returned to Haiti 21 January 2011 for the first time since he left in 1986, saying he wanted to help his people, following the massive earthquake there. He had been living in exile in France, initially with a luxurious lifestyle, but he lost much of his money in a costly divorce to his wife Michele.
25 years to close the Swiss law loophole
The RUAA was created to close a loophole in Swiss law that had made it impossible for Switzerland to return the money to Haiti, which never had a stable government long enough in the post-Duvalier days to be able to instigate a claim itself and supply the information required by Switzerland.
Swiss authorities, who made it clear over the years they did not believe the money should be allowed back in Duvalier family hands, kept the funds blocked, but early in 2010 there was a close call where it appeared that Switzerland would not be able to legally continuing blocking the funds.
The federal government 2 February, the day after the new law went into effect, asked the Federal Finanace Department to start proceedings.
Background story, Duvalier funds, GenevaLunch, February 2010
Bern, Switzerland (GenevaLunch) – Thirty banks and financial institutions have reported and blocked some CHF80 million in assets belonging to former Tunisian dictator Ben Ali, Swiss federal police office spokesperson Danièle Bersier said Sunday. He confirmed to news agency ATS information that had appeared earlier in the day in Swiss newspaper SonntagsZeitung.
Ben Ali fled Tunisia 19 January and five days later the federal government issued an order to freeze assets belonging to him and 40 people in his entourage. The new Tunisian government will now need to request judicial assistance in order to start a court case to obtain the funds if they were obtained illegally.
“Still too early” says Swiss government to say how much money is involved
EU reportedly decides today if it will follow Swiss example
Zurich, Switzerland (GenevaLunch) – Assets held in Switzerland, now or in the past, by former Egyptian leader Hosni Mubarak and his family and friends may not easily be traced, but details are beginning to surface in Bern, the Swiss Foreign Affairs Department (FAD) told GenevaLunch Tuesday.
The Swiss government announced late Friday 11 February a new ordinance requiring banks and other financial institutions to freeze assets for a group of 12 individuals in the Mubarak entourage.
“It’s still too early to provide more information, for example, the amount of money involved,” FAD spokesperson Jenny Piaget says.
The European Union is reportedly considering Tuesday if it should follow the Swiss example and move to freeze Mubarak’s assets.
The Swiss ordinance requires “persons or institutions that hold or manage assets or who have any knowledge of financial resources that fall within the scope of assets blocked” by the ordinance “must declare this information immediately to the Directorate of International Law (ed. note, part of the foreign ministry).” The declaration must provide the name of the asset-holder, the object itself and the value of assets and financial resources that have been frozen.”
Swiss bankers, others with Mubarak asset information required to alert Bern quickly
The fine for not providing information is CHF20,000 plus a fine of 10 times the value of the object, whether it is bank funds or real estate or other assets.
There has been widespread speculation about the amount of money the former Egyptian president has in Switzerland or elsewhere. The amounts estimated by some sources appear to be exaggerated, in light of the overall amounts of money that have moved between Switzerland and Egypt in recent years.
Egyptian money in Switzerland has fallen since 2005 Read more…
Lausanne train station: another set of tracks heading towards Geneva is on the books for 2018
Lausanne, Switzerland (GenevaLunch) - Canton Vaud Tuesday 1 February approved the funds that will allow a third rail line for the congested Geneva-Lausanne tracks to be built in 2018 instead of four years later, as the federal government had planned.
The area’s population has been growing rapidly for the past 20 years and projections are that the rate of increase will remain strong: the area west of Lausanne is expected to grow by 20,000-30,000 people by 2020.
Cantons Vaud and Geneva in December 2009 signed an agreement with the Federal Transport Office to find the funds for loans to the CFF rail company to advance several critical projects.
Yesterday the canton approved nearly CHF200 million for four projects: additional crossings in Mies and Chambesy, pre-financing for the Lausanne-Renens third rail line, modernization of the Renens train station and feasibility studies for the Geneva-Lausanne additional rail line.
Geneva financing approval en route
Australia creates flood tax
Displaced Afghan refugee Gul Hassan is taking refuge on a road side near Hajizai Afghan refugee village which was destroyed by recent floods; August 2010 (UNHCR / R. Ali)
Geneva, Switzerland (GenevaLunch) - Monsoon floods that devastated Pakistan in 2010 continue to cause extreme hardship in the face of a funding shortfall, the International Organization for Migration (IOM) in Geneva says.
“This natural disaster, unprecedented in terms of destruction of housing and infrastructure, has necessitated an unprecedented response,” the IOM notes in a statement issues 27 January.
The UN agency coordinates some 300 agencies and NGO (non-governmental organization) groups involved in the Shelter Cluster programme to re-house people in the region.
It says international donors have contributed US$1.1 billion or 56 percent of a UN appeal for US$1.96b launched in September 2010. Agencies in the Shelter Cluster appealed for US$322 million and have received US$126m or 39 percent.
Some 11 million people were left homeless, with 1.7 million houses destroyed. Punjab province alone saw twice as many people lose their homes as did in the 2010 earthquake in Haiti. Those caught by the floods include Afghan refugees.
Millions have been helped but “unless more funding is forthcoming, at least half a million families who lost their homes and need help to rebuild either a one-room or a transitional shelter will receive nothing,” according to the IOM.
Italy in 2007 gave Ghana €22 million to support small and medium-sized companies as part of overall development funding, but three years later the funds remain untouched, to the dismay of Ghana’s entrepreneurs, reports allAfrica. The money was designed to top up a €11m fund set up by the Italian government in 2003, according to the Chronicle newspaper, but the funds added in 2007 have reportedly not been disbursed mainly due to bureaucratic bungling. Other governments have also been involved in funding small business projects in Ghana, among them the US-financed African Development Foundation.
In May 2009 the Italian government announced a new $20m fund for small businesses in Ghana, to boost employment.
Other stretches of Swiss autoroute are studying the Morges-Lausanne solution of adding 2 lanes during rush hour
Bern, Switzerland (GenevaLunch) - Projects such as the third rail line between Vaud and Geneva, considered urgent in the region but far down the long 20-year list of Swiss transport projects, will now be able, in exceptional cases, to get advance funding. The lower house of the Swiss parliament Tuesday joined the upper house in voting to extend CHF850 million in credit to the transport infrastructure fund, to avoid a cash flow crunch as projects become urgent ahead of their scheduled funding. The third rail line is one such exceptional case, with population and workforce growth in the region outstripping planning figures.
The fund was created in 2008 to finance special projects designed to reduce road traffic congestion in cities, larger urban areas and on the autoroutes.
Parliament also voted to spend CHF1.51 billion on 26 projects to improve transport in urban areas. Some CHF1.51 of the money goes to the most urgent projects to reduce traffic jams on autoroutes.
Bern, Switzerland / Lagos, Nigeria (GenevaLunch) - Switzerland insists that it does more than any other government to return funds stolen by dictators, and Nigeria is a case in point. But Nigerians are now worried about how to make sure the funds land in the right place in order to put back into the budget money taken out of government coffers illegally.
An editorial published 7 June in This Day/allAfrica notes that
According to a report from Global Financial Integrity, total illicit outflows from Africa between 1970 to 2008 may be as high as $1.8 trillion; Sub-Saharan African countries experienced the bulk of illicit financial outflows with the West and Central African region posting the largest outflow numbers. The top five countries with the highest outflow measured were: Nigeria ($89.5 billion) Egypt ($70.5 billion), Algeria ($25.7 billion), Morocco ($25 billion), and South Africa ($24.9 billion).
The editor says “It is, therefore, cheering to note that the Swiss government now wants to make it difficult for people who loot state treasuries to save looted funds in Swiss banks. We want to believe that that pledge by Switzerland’s Deputy State Secretary of the Swiss Federal Ministry of Foreign Affairs, Ambassador Pierre Helg, the other day in Abuja is sincere.”
The next step, he argues, is up to Nigeria. “there seems to be no transparency in the in the repatriation of looted funds. Nigerians deserve to know amounts repatriated as they happen and of what use the money is put. This lack of transparency has fuelled speculation that looted funds, if brought back, only meet re-looting.”
Global Forum in Paris this week in response to G-20 demand
Nigerian concern comes as Switzerland leads a two-day international conference in Paris, the Global Forum on the Recovery of Assets and Development, jointly organized by Switzerland, the World Bank and the United Nations Office on Drugs and Crime (UNODC).
The forum is part of the lead-up to the G-20 summit in Toronto, Canada 26-27 June.
Panning for gold in the Rhone, upper Valais, 16 May 2010 (click on image to view larger)
Bern, Switzerland (GenevaLunch) - Swiss pension plans are looking healthier than they were during the global economic crisis, with 80 percent of them back to a coverage rate of at least 100 percent, according to the 2010 Swisscanto report.
The institute, jointly owned by Switzerland’s cantonal banks, offers advisory services on pension funds and produces an annual study of the Swiss pension market.
The latest report, available only in German, shows that coverage has gone up nearly 6 percent on average in the past 12 months, although it remains below the 110 percent level seen in 2005..
Public pension funds continue to have inadequate reserves, the report notes, and lawmakers will be forced to deal with how to refinance them in coming months.
The group interviewed 278 pension funds with a value of CHF369 billion, about 60 percent of all pension funds in Switzerland.
Swiss high court ruling on Haitian ex-dictator Jean-Claude Duvalier’s money will lead to new law
Talloires, France, near Geneva, where the Duvaliers fled after leaving Haiti in 1986 (photo: Talloires Tourisme)
Update (links added) 23:30 Bern, Switzerland (GenevaLunch) – The Swiss government Wednesday morning 3 February took the unusual step of freezing funds in a bank account once held by Haiti’s former dictator, Jean-Claude Duvalier, based on a special cases clause in the Swiss constitution. At the same time the Swiss supreme court published its ruling on the frozen assets, saying that they cannot be returned to the Haitian people as mandated by the Swiss Office of Justice in 2009. The court decision has prompted the Swiss Federal Council to freeze the funds long enough to pass a law that will help it avoid releasing the assets “for the benefit of the Duvalier clan, which the Federal Criminal Court deems to be a criminal organization.”
A new law would allow the Swiss parliament input on how to best return the money to Haiti.
The ruling Federal Council is asking the Foreign Affairs Department to “complete by the end of the month its work on drafting a federal law that would ultimately allow such assets to be confiscated, and to submit the draft law for consultation.” A spokesperson for the Federal Foreign Affairs Office told GenevaLunch that the law is likely to be passed in 2010. It will cover similar situations of confiscated assets, several of which have come up in recent years.
Switzerland is the only country in the past 20 years to have returned stolen “potentates” funds to the countries previously ruled by the dictators: more than CHF1.6 billion has been returned to Peru, the Philippines and Nigeria among others.
The Duvalier family has been fighting to obtain access to $5.7 million sitting in Swiss bank accounts since they were frozen in 1986, when the Haitian government made a first request for assistance to obtain what it said were stolen funds. Jean-Claude Duvalier, popularly known as Baby Doc, ruled Haiti starting in 1971, when at age 19 he became the world’s then-youngest ruler. His father, known as Papa Doc, had ruled it for the previous 13 year.
Haiti earthquake, the aftermath (Photo: Matthew Marek/American Red Cross)
Geneva, Switzerland (GenevaLunch) – Several organizations based in Switzerland are spearheading much of the relief effort in Haiti, and they are appealing to the public for funds. Aid has begun pouring into the country, more than 30 hours after the 7.0 scale earthquake that ravaged the capital, Port-au-Prince.
If you live in the Lake Geneva area and you would like to contribute to funds going to Haiti, here is a GenevaLunch selection of key groups, with fund appeals and explanations about their work in the area on their web sites:
Recently renovated La Suisse paddleboat, Ouchy-Lausanne
Lausanne, Switzerland (GenevaLunch) – The CGN (Compagnie 
Générale de Navigation) has fully subscribed the additional capital it wanted to raise, CHF2 million, to ensure the renovation of one of its Belle Epoque boats, the Simplon. The money allows it to also set aside a provision for work on another paddleboat, the Italie.
The group is 80 percent owned by 10,000 small investors, with 40 communes who use its services making up the difference. Cantons Geneva, Valais and Vaud provide loans for major renovations of the fleet and they contribute an annual fee for the services CGN provides.
Bernard Madoff’s court-appointed trustee in New York, USA, is suing the largest feeder fund for his investment scheme: according to the trustee, the Fairfield Greenwich Group knew in 2005 he was under investigation and ignored several signs that he was involved in fraud, reports Reuters. The trustee is suing for $3.5 billion, money the trustee says was paid by Madoff on the part of his clients.
Zimbabwe is asking its southern African neighbours for $2 billion in emergency financial assistance to help restore its infrastructure, South African Finance Minister Trevor Manuel has told his country’s radio, reports the BBC.
