Egyptian frozen assets case makes headway

Cairo's Tahrir Square, the scene of fierce clashes between anti-military rule protesters and security forces, was a lot less crowded as Egyptians went to the polls AFP

Despite recent turmoil in Egypt, the case involving millions of dollars of alleged ex-regime money frozen in Swiss banks appears to be advancing.

Switzerland is optimistic it can soon conclude a legal assistance procedure, like that with Tunisia, says a top official. It has blocked SFr410 million ($445 million) of assets said to belong to former President Hosni Mubarak and his entourage.

The turnout on Monday and Tuesday for Egypt’s landmark parliamentary elections, the first since a popular uprising toppled Mubarak in February, has been huge despite security concerns after deadly violence in the week beforehand.

Swiss officials say the possible return of the blocked assets has not been affected by either the recent chaos or the ongoing election process.

“We are still continuing our contacts with the Egyptian authorities,” Valentin Zellweger, head of the international law section at the Swiss foreign ministry, told swissinfo.ch. “Based on these, we believe the Egyptian justice system will pursue criminal proceedings.”

Swiss law only allows money frozen in its banks to be confiscated and returned after its source has been declared illicit by a court.

Switzerland is confident it can attain its goal of finalising a formal legal procedure with Egypt similar to the one with Tunisia, said the legal expert.

At the beginning of October Tunisia’s request for legal assistance concerning the restitution of SFr60 million held in Swiss banks allegedly belonging to former President Zine el-Abidine Ben Ali and his entourage was accepted by the Federal Justice Office.

Progress

A request for mutual legal assistance received from Egypt was forwarded to the Federal Prosecutor’s Office in August. Egyptian experts are set to visit soon to iron out outstanding issues, said Zellweger.

And the prosecutor’s office last month opened a criminal case into allegations of money laundering and participation in a criminal organisation by members of Mubarak’s family.

But Fribourg-based lawyer Ridha Ajmi, who has led moves to freeze assets held in Switzerland by the Egyptian and Tunisian leaders, felt the current Egyptian leadership was not interested in speeding things along.

“The military authorities are desperately trying to stay in power. They don’t want to discuss sensitive issues like this,” he said.

“Legal profits”

According to Egypt’s deputy justice minister, Assem al-Gohary, who also heads the Illicit Gains Authority which is assigned with retrieving illegal money stashed abroad, Mubarak’s two sons Alaa and Gamal have an estimated $340 million in Swiss bank accounts, with the major share – $300 million – held by 49-year-old Alaa.

But the Mubarak family lawyer Farid al-Dib told Foreign Policy magazine earlier this month that the Swiss-held funds were actually “legal profits” and interest earned on “the sons’ work in global stock-market consultation with clients outside of Egypt”.

The 83-year-old former president, his two sons, the former interior minister Habib al-Adli and six senior police officers are currently on trial in Egypt facing a range of charges including involvement in killing protesters and corruption. They all deny the charges. The president’s next trial hearing is on December 28.

In mid-October businessman Hussein Salem – one of Mubarak’s closest aides – his son Khaled, and daughter Magda were sentenced in absentia to seven years in jail and a combined fine of more than $4 billion on charges of money laundering and profiteering. Salem fled Egypt on February 3 and was arrested in Spain in June on an international warrant.  Egypt has requested his extradition.

Al-Gohary believes the wealth of Salem and his family exceeds $4 billion but says funds have been transferred overseas in the past six months, including to Hong Kong and the United Arab Emirates.

Swiss ties

The tycoon also has links to Switzerland via two Geneva-based firms, Maska SA and Galaxy Hotels SA. According to the Tribune de Genève, Maska SA is being liquidated.

Ajmi said he was surprised the Swiss authorities had not paid closer attention to Salem, who he described as Mubarak’s “right-hand man”.

“I’ve asked the Swiss authorities many times – why, if he was arrested in Spain, were Salem’s assets not frozen in Switzerland?” he told swissinfo.ch.

“I want to know how much was injected into these firms and where the money comes from, whether it’s Egyptian public money.”

In February Ajmi sent the federal authorities a list of 21 top Egyptian officials suspected of holding assets in Switzerland. The Swiss eventually drew up a list of 14, including Mubarak and his family, but without Salem.

According to the Swiss foreign ministry, the Swiss decree on the freezing of Egyptian assets and list of names was based on analysis by Swiss diplomatic representatives in Egypt together with information from all countries concerned.

Frozen assets

The Swiss financial market regulator (Finma) announced earlier this month it had moved against four banks which it says have not fulfilled due diligence obligations in relation to dictator’s assets.
 
Finma said it had conducted an “extraordinary audit” of 20 banks’ dealings with politically exposed persons (Peps) in the wake of decisions by the Swiss government to freeze assets belonging to the former leaders of Egypt, Tunisia and Libya earlier this year.
 
The subject of Mubarak’s wealth among others has long been a matter of speculation, with many Egyptians believing he and his family own up to $70 billion (SFr68 billion) worth of assets, some of which is allegedly held in secret offshore bank accounts.

Egypt’s first parliamentary vote since Hosni Mubarak was ousted began on Monday and the first round of voting is being held over two days. The staggered vote will be spread over six weeks.

Egyptians in Switzerland (2010)

Permanent resident total: 2,088
 
Born abroad: 1,922
 
Born in Switzerland: 166
 
There were another 114 non-permanent resident Egyptians