Switzerland has gained a reputation as being a safe haven for storing either legitimate or ill-gotten gains. Wealthy tycoons and officials from all over the world have in the past taken advantage of the country’s strict bank secrecy laws.
And Switzerland — one of the most prosperous countries in the world with a gross domestic product of $680 billion shared by only 8.4 million people — has of course proved attractive for some of Ukraine’s most influential oligarchs.
For example, tycoon Ihor Kolomoisky now lives in the Swiss city of Geneva, while President Petro Poroshenko has transferred control of his Roshen confectionery to a blind trust run by Switzerland’s Rothschild Trust.
But in recent years Swiss authorities have actively cooperated with Ukraine in freezing the bank accounts of Ukrainians suspected of crimes, and in recovering assets. In fact, it appears that the Ukrainian authorities — not the Swiss government — are the ones that frequently apply the brakes in investigating these cases.
Ukraine’s Prosecutor General’s Office did not respond to a request for comment.
However, Swiss Ambassador to Ukraine Guillaume Scheurer told the Kyiv Post that the Swiss prosecutor recently “confirmed excellent cooperation with” the Prosecutor General’s Office of Ukraine.
Scheurer said that Switzerland was “among the very first countries” to freeze the bank accounts of people connected to ex-Ukrainian President Viktor Yanukovych’s regime after it collapsed in 2014. Currently $72 million remains frozen.
Scheurer said that Ukraine, at first, “didn’t have the technical and legal abilities” to trace the money and provide Swiss authorities with required proof. However, he said, “this has very much improved because of better lawyers, better information, better willingness to work these cases.”
But financial crime cases are complicated and “take a lot of time,” sometimes decades, before the money is recovered and returned to the victimized country in a judicial process.
“It’s impossible if you want to respect rule of law to have a fast track of repatriation,” Scheurer said.
Ready to cooperate
“As far as I know, Switzerland is one of the countries that are the most open to cooperation” on asset recovery, Daria Kaleniuk, executive director of the Anti-Corruption Action Center, told the Kyiv Post. “Switzerland is one of the few countries that have been cleaning up their bank system for years.”
She also said that Switzerland was much more eager to cooperate with Ukraine on corruption cases than neighboring Austria.
But Kaleniuk said that Ukrainian authorities were reluctant to provide information on the origin of funds to the Swiss authorities, a circumstance that can block asset recovery.
Sergii Gorbatuk, former head of the special investigations unit of the Prosecutor General’s Office, also told the Kyiv Post that Swiss authorities were actively cooperating in corruption cases.
Yanukovych and allies
In 2014 Swiss authorities froze assets of Ukrainian ex-President Viktor Yanukovych and his associates worth about $72 million.
Mako Trading, a company owned by Yanukovych’s son Oleksandr, has about $1 million in a Swiss bank account.
And one of Yanukovych’s major allies, tycoon Serhiy Kurchenko, faces a money laundering investigation in Switzerland — he registered his natural gas trading companies, Vetek Gas Trading and Supply & Vetek Trading, in Switzerland in 2013.
Meanwhile, the family of Oleksandr Yefremov, ex-head of Yanukovych’s Party of Regions faction in parliament, has squirreled $34 million into his Swiss accounts since 2006, according to Deutsche Welle.
Yefremov has been charged with embezzling funds by selling equipment worth about $384 million to Ukrainian state coal producer Luhanskvuhillya at inflated prices from 2008 to 2014.
In February, a Swiss court also refused to unfreeze $73 million linked to Yuriy Ivanyushchenko, an ex-lawmaker from Yanukovych’s Party of Regions.
“There is an investigation (against Ivanyushchenko) in Switzerland but, since there was no cooperation from Ukraine, we can’t get the money back,” Kaleniuk said. “There’s no information on the criminal origin of the funds.”
Ivanyushchenko was removed from the wanted list in 2016 by a Kyiv court, and in 2017 the Supreme Court closed the case against him, citing inaction by prosecutors. Ivanyushchenko was accused of embezzling $243 million.
In 2017, Kyiv’s Pechersk Court allowed the Prosecutor General’s Office to request a freeze on the Swiss bank accounts of ex-Prime Minister Mykola Azarov’s son Oleksiy. According to the prosecutors, he has 7.7 million euros, 600,000 Swiss francs and $500,000 on bank accounts in Switzerland, Liechtenstein and Italy.
Switzerland has also frozen $13 million belonging to Serhiy Klyuyev, an ex-lawmaker from Yanukovych’s Party of Regions.
Another major suspect linked to the Yanukovych regime, ex-High Commercial Court Deputy Chairman Artur Yemelyanov, also has connections to Switzerland.
Yemelyanov’s son studies in Switzerland, and his father came to celebrate his birthday in Geneva in 2015, according to an investigation by Radio Liberty/Radio Free Europe.
The assets of Yemelyanov’s wife — worth 13 million Swiss francs (or $13.4 million) — have also been frozen in neighboring Liechtenstein, but were unfrozen in July 2016 due to Ukrainian prosecutors’ failure to provide information on Yemelyanov’s alleged crimes.
In 2016, Yemelyanov was charged with illegally interfering with lower-level judges’ work to make them pass unlawful rulings.
In June, Swiss authorities also transferred to the Prosecutor General’s Office of Ukraine documents involving the alleged embezzlement of funds at state ammonia shipping firm Ukrtransammiak by Viktor Bondyk, the former head of Ukrtransammiak and an ally of Yanukovych.
Martynenko case
The National Anti-Corruption Bureau of Ukraine or NABU, has been more successful at cooperating with Switzerland than the Prosecutor General’s Office, which is investigating Yanukovych-era cases.
One of the NABU’s suspects, ex-People’s Front party lawmaker Mykola Martynenko, owns Panamanian companies that hold money in Swiss banks, according to the bureau. The NABU, as well as Swiss and Czech authorities, have also been investigating Martynenko on suspicion that he accepted $31 million from Czech engineering firm Skoda to confirm a contract to supply equipment to Ukraine’s state nuclear power monopoly Energoatom.
In 2017, the Federal Supreme Court of Switzerland rejected an appeal by Martynenko and ruled that information about the Swiss bank accounts of his Panamanian companies can be given to NABU detectives.
Kaleniuk said that the Martynenko case was more successful than others, that the NABU had identified the scheme by which Martynenko’s money had been transferred to Switzerland, and that it had provided the necessary information to the Swiss authorities.
