Swiss Arrest Ambassador On Suspicion Of Money-Laundering

by Ulrika Lomas, Tax-News.com, Brussels

12 July 2002

The Swiss Federal Prosecutor's Office announced yesterday that the country's ambassador to Luxembourg, Peter Friederich, had been taken into custody on Monday on suspicion of money laundering. The prosecutor's office said the arrest had been made "in connection with private transactions worth hundreds of thousands of francs".

Hansjürg Mark Wiedmer, a spokesman for the Prosecutor's office, told swissinfo that authorities were eager to uncover the origins of the money. “We were informed by the authorities in Luxembourg at the end of February," Wiedmer said.

Originally, the tip-off did not involve Friederich, but after more information was provided from Luxembourg, the ambassador became implicated. " Wiedmer said the alleged laundering was a private matter and did not affect the Swiss embassy.

Commentators are worrying that the case will weaken Switzerland's hand in crucial negotiations with the EU over banking secrecy; but the opposite could also be true, since the Swiss have long maintained that their defences against money-laundering are as tough or tougher than anyone's.

The term 'money-laundering' in Swiss usage would clearly refer to the handling of money resulting from criminal activity, not including tax evasion; but at this stage there is no indication of the source of the money behind the allegations, or of Mr Friederich's supposed role in handling it.

The Prosecutor's Office said it had opened its investigation against Ambassador Friederich based on Article 305 of the Swiss Penal Code, which imposes reporting obligations on financial intermediaries, including lawyers and brokers, who become aware that funds may be the proceeds of criminal activity.

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