Swiss crackdown on white-collar crime has a timing problem, prosecutor says

BERN, June 15 - Swiss financial crime prosecutors are racing against time as outdated regulation in one of the world's top cross-border wealth management centres allows defendants to drag out rulings, says the country's attorney general.

Last month, Switzerland's criminal court dropped action against a former Credit Suisse compliance chief over a scandal that helped bankrupt Mozambique's economy a decade ago, after the money-laundering case exceeded its statute of limitations.

Another high-profile case hit a similar hurdle in April, when Switzerland discontinued a trial against Gulnara Karimova, daughter of Uzbekistan's late president Islam Karimov. She was accused of running a criminal organisation that allegedly channelled hundreds of millions of dollars to Swiss bank accounts.

"In the end, we often have a race against time," said Attorney General Stefan Blaettler, who has recently secured bribery convictions of commodity traders Trafigura and Gunvor, along with money-laundering penalties against several banks.

Blaettler, a lawyer and former Bern cantonal police chief, has prioritised a crackdown on white-collar crime since he took office in 2022. He has seen results, but also faces challenges, not least from regulatory shortcomings.

Pre-digital-era rules allow defendants to seal evidence and challenge the sharing of information with foreign prosecutors, delaying access to terabytes of data while the statute-of-limitations clock keeps ticking, Blaettler told Reuters in a recent interview.

"People rightly ask us why our criminal proceedings sometimes take 15 years," Blaettler said. A report by the Office of the Attorney General cited an investigation of Swiss private bank J. Safra Sarasin in a graft scandal linked to Brazil's state oil company Petrobras, in which evidence remained sealed for over five years before the bank was eventually fined in 2025.

LACK OF POLITICAL WILL

Anyone who is accused must have appropriate procedural rights, but judgments show that in around 90% of cases with sealing requests, prosecutors are found to be right after a long delay, Blaettler said. "I find that untenable."

The Swiss government is evaluating whether to cooperate more closely with the European Union to quickly seize digital evidence, the justice ministry said in response to a Reuters query on whether Switzerland is adapting its procedures.

The initiative could address the timing issue identified by prosecutors, the ministry added.

Swiss lawmakers, however, have watered down recent government proposals to help prevent financial crime, saying the country needs to stay competitive in cross-border wealth management as rival centres are gaining ground.

The will to consistently apply the law to crack down on financial crime has increased under Blaettler, but lawmakers remain reluctant to address legal shortcomings, according to Public Eye, an advocacy and research group.

"The right-of-centre majority in parliament is fighting tooth and nail any strengthening of the tools to combat white-collar crime, which is slowing the implementation of reforms that have long been identified," Public Eye said. Some reforms, covering due diligence requirements for certain high-risk advisory activities, are due to come into effect in October.

With its strong economy, hard currency and political stability, Switzerland remains prone to financial crime, said Transparency International, an anti-corruption watchdog.

"Money launderers also seek security," said Urs Thalmann, who heads the group's Swiss chapter. "We believe that only the tip of the iceberg ever reaches criminal prosecution."

Switzerland has in the past decade moved to end banking secrecy, which attracted illicit funds, and began automatically sharing client data with tax authorities in dozens of other countries.

PIPELINE OF CASES

Money-laundering prosecution has improved thanks to a stream of suspicious activity reports coming out of Switzerland's financial crime unit, Blaettler said, noting that international cooperation is absolutely critical to get results.

Last year, Switzerland entered a trilateral anti-corruption taskforce with Britain and France to coordinate cross-border investigations, closing ranks in Europe even as technical cooperation with the United States still works well, Blaettler said.

"We have other cases in the pipeline that will come in the near future, either in the form of indictments or penalty orders," he added. "I cannot say in advance how long such proceedings will take." REUTERS