Swiss return funds to Taiwan in frigate scandal

One of the French-made frigates that sparked the scandal Keystone

Switzerland has returned $34 million (SFr42.3 million) to Taiwan in connection with a corruption case over the sale of frigates to Taipei by a French company.

The justice ministry confirmed on Wednesday that proceedings for an additional $490 million blocked in Swiss bank accounts were continuing.

The affair, dating back to 1991, involves the controversial $2.5 billion (SFr3.25 billion) sale of six Lafayette frigates to Taiwan by the French former state-owned firm, Elf Aquitaine.

It is alleged that Elf Aquitaine, via another French firm, Thomson-CSF, paid bribes to persuade French and Taiwanese authorities to approve the sale of the warships.

Both Switzerland and Liechtenstein have blocked funds in accounts allegedly linked to the case.

According to Paul Perraudin, the federal examining magistrate, the $34 million was handed back as a result of legal aid by Switzerland and with the express consent of two account holders.

The repayment was made “conditional upon assurances from the Taiwanese authorities that legal proceedings against the two persons in question would comply with human rights principles” the magistrate said in a statement. The justice ministry considered the guarantees sufficient, he added.

Unknown identities

Perraudin declined to identify the two owners of the $34 million, but told the Associated Press that one of them was a Taiwanese public official.

The money does not belong to the family of fugitive arms dealer Wang Chuan-pu, who fled Taiwan in 1993 after the frigate deal turned into a scandal, Perraudin said.

Wang was a local agent for Thomson-CSF. He fled Taiwan following the death of a navy captain, who was widely believed to have been murdered when he was about to blow the whistle on colleagues for allegedly taking kickbacks in the Lafayette deal.

A large part of the remaining $490 million belongs to Wang’s bank accounts. Perraudin said he will decide later whether to release the money.

Taiwan has charged Wang with murder, corruption, money-laundering and fraud. A Taiwan court issued a warrant for Wang’s arrest but he went into exile first in the United States and later in Europe.

The investigations into the arms scandal began when Taiwanese authorities concluded from the inflated price that the deal constituted a serious case of international corruption.

France, Liechtenstein and Taiwan, investigating whether the case had violated their laws, asked Switzerland to hand over the bank documents to further their investigations.

swissinfo with agencies

In brief

The six warships were sold in 1991 to the Taiwanese navy by the French firm Thomson-CSF. The deal cost Taiwan $2.5 billion.

Former arms dealer Andrew Wang, who was a local Thomson agent in Taiwan, is suspected of having paid bribes to Taiwanese officials to secure their agreement on the deal.

The Swiss Federal Court ruled in October 2005 that bank documents related to the case could be handed over to Taiwan after receiving assurances from Taipei that it would not use the death penalty against anyone convicted in the case.

On November 8, 2005, Switzerland forwarded a large number of legal assistance files to the prosecuting authorities in Taiwan, France and Liechtenstein in support of investigations into corruption and other crimes associated with frigate sale.

On September 5, 2006, the Taiwanese authorities lodged an application for the handover of assets that had been frozen in Switzerland as part of criminal and international legal assistance proceedings.