[JOINT MEDIA STATEMENT] ASSET RECOVERY INITIATIVE (15 MARCH 2018): Reclaiming 1MDB Frozen Funds That Rightfully Belong To Malaysians Is Not ‘TRAITOROUS’; C4-led Asset Recovery Initiative Is In The Interest Of The Nation

C4 Center and BERSIH 2.0 upholds the right to pursue justice and good governance by our actions to lobby actors in Bern, Switzerland this week. Our actions in Bern, Switzerland, guided by our mission to ensure that kleptocracy and grand corruption is quashed in Malaysia, was rightful under the United Nations Convention Against Corruption (UNCAC), and will continue despite the rejection of the Swiss Parliamentary motion: the fight is far from over.

“We have the principles of UNCAC behind us, which Article 13 upholds the freedom of civil society to seek, receive, publish and disseminate information concerning corruption. It is clear that such a penalty could only happen because 1MDB funds were allowed to be misappropriated—if leaders were not outrightly complicit themselves!”—Cynthia Gabriel, C4 Center

“1MDB has highlighted gaps in the democratic process that need to be addressed urgently. The Article 9 (3a) of the UN Declaration of Human Right Defenders clearly states that action taken to lobby for change or remedy where a violation human rights has occurred, is within the right of HRDs. Lobbying for change, reform and a better future is not a crime.”—Shahrul Aman, BERSIH 2.0

Cynthia Gabriel, Exceutive Director of C4 Center, had been in Switzerland this week to meet with Swiss parliamentarians and activists in anticipation of a Swiss parliamentary motion to amend their laws on asset recovery to enable the restitution of 104 million CHF (430 million MYR) in penalties against banks for laundering 1MDB funds to Malaysian citizens. Switzerland is proud to be a key player in asset recovery, in restitituting Brazil, Kazakhstan and Nigeria of seized assets found in Swiss banks.
Consequently, Minister of Communications and Multimedia Datuk Seri Salleh Keruak’s labelled among others, C4 Center as traitors for spreading fake news and for lobbying the Swiss government. Such extreme reactions from the government is not new or unexpected, as the government has consistently used strong methods to silence voices speaking on 1MDB of which one of said methods is arbitrary detention under the Security Offences (Special Measures) Act 2012 (SOSMA).
Datuk Seri Salleh Keruak’s response to C4 Center lobbying Swiss Parliamentarians and the 1MDB-issued statement stating that the sum does not belong to 1MDB or the government of Malaysia, stem from the motion having failed to pass at the Swiss Parliament.
This arises as a misunderstanding of the nature of the rejection of the parliamentary motion. The motion failed because (1) two of the three charged banks are stilll appealing against FINMA’s decision at the Federal Court, (2) they are awaiting outcomes from the Swiss Attorney General on ongoing investigations, and (3) therefore, the Swiss parliament as the legislative arm of the government intends to uphold the doctrine of separation of powers while the judiciary deliberates on the two cases.
This by no means, ends the case of seeking restitution of the 104 million CHF. Swiss foreign minister Ignazio Cassis pointed to the fact that the motion tabled had to have more specific details on the 1MDB and the judicial and Attorney General’s decisions could determine a better vote outcome from the Parliament.
“It will be difficult to get a majority (in parliament) but we are confident. If there is no majority it is not a defeat, it is a first step.”—Carlo Sommaruga, Swiss National Councillor
However, C4 Center and BERSIH 2.0 remain resolute that the case is deeply rooted with 1MDB fraud and malpractice, and therefore greatly impacts on the interest of all Malaysians. The three Swiss banks involved were fined because of their complicity in the laundering of 1MDB funds. In all cases, the banks were responsible for the dubious transfer of hundreds of millions of dollars:

  1. FINMA, the Swiss financial regulatory authority, had sanctioned RBS Coutts because it “uncovered serious deficiencies in the bank’s anti-money laundering processes for business relationships and transactions associated with the alleged corruption scandal involving the Malaysian sovereign wealth fund 1MDB”. [link]
  2. For BSI Bank, FINMA gave the notice that “In the case of 1MDB, the bank executed numerous large transactions with unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify the background to these transactions”. Consequently, BSI Bank was ordered to be dissolved in Switzerland. [link]
  3. For Falcon Bank, FINMA publicly stated that “Assets amounting to approximately USD 3.8 billion were transferred to accounts at Falcon and associated with the 1MDB Group during that period… The bank failed to adequately check the background and risk profile of these complex transactions in sufficient depth. ” Not only that the found that members of the board of directors initiated the business relationships. [link]

This course of action to persuade countries to restore money laundered overseas to damaged parties, Asset Recovery, is a landmark feature of the United Nations Convention Against Corruption (Chapter V of UNCAC). Our model landmark case is the BOTA Foundation, which restored in excess of USD 84 million to needy Kazakhstan citizens independent of their own government.
As Malaysia is a signatory of UNCAC, which itself came into force 2005, it has its own international legal responsibilties to uphold asset recovery.
1MDB’s excuse that the money belongs to the banks, is poor reasoning as the penalty itself derives ultimately from its own funds being transferred overseas. Therefore, it is right that Malaysians pursue the repatriation of those funds.
We challenge Datuk Seri Salleh Keruak, as Minister of Communications and Multimedia, to be more assiduous in his own fact-checking before he accuses other parties, lest he be guilty of spreading fake news himself.
C4 Center, together with BERSIH 2.0, Global Bersih and Bruno Manser Fonds (BMF) and 110 endorsing Malaysian NGOs, will continue to build the case, gathering support and allies, and will be closely monitoring the upcoming developments in court appeals by the banks in Switzerland.
Released by:
Cynthia Gabriel (Ms.)Executive Director, C4 Center
Shahrul Aman (Mr.) Acting Chair, Bersih 2.0

Links Provided

  1. FINMA Press Release, “FINMA sanctions Coutts for 1MDB breaches”, 02 February 2017, https://www.finma.ch/en/news/2017/02/20170202-mm-coutts/.
  2. FINMA Press Release, “Falcon sanctioned for 1MDB breaches”, 11 October 2016, https://www.finma.ch/en/news/2016/10/20161011-mm-falcon/.
  3. FINMA Press Release, “BSI in serious breach of money laundering regulations”, 24 May 2016, https://www.finma.ch/en/news/2016/05/20160524-mm-bsi/.