US, Swiss: Partners Against Crime. Swift arrest of Khashoggi shows closer cooperation on legal matters is paying off
THE arrest of arms-dealer Adnan Khashoggi in Bern last week, is evidence that justice moves swiftly these days when the Americans and the Swiss are involved. It took less than two hours for Swiss police to pick up Mr. Khashoggi after the United States Embassy contacted the Swiss Justice Department, according to Joerg Kistler, spokesman for the Swiss Justice Ministry.
That is a far cry from the days of the Marc Rich scandal in 1983, when the US asked the Swiss to extradite the American financier for tax evasion and the Swiss refused.
The closer cooperation has been forged by growing concern on both sides about international drug networks, money laundering, and insider trading. In November, 1987, then-head of the Swiss Justice Ministry, Elisabeth Kopp, visited the US and signed a memorandum of understanding with the Justice Department to clarify the procedures used in soliciting legal assistance.
Khashoggi was arrested at the request of the US, which is expected to file a formal extradition request soon. The Saudi Arabian financier is wanted for questioning in connection with the theft of paintings from the Philippines by Ferdinand and Imelda Marcos.
For the US, better cooperation means faster investigations into crimes with a Swiss angle. For the Swiss, working more closely with the US is an effort to counter the accusation that they provide a safe haven for criminal money. More broadly, the new relationship is seen as a key element in a coordinated fight by various governments against the growing sophistication of drug related criminal networks, which may have a Swiss banking connection.
The Khashoggi case is only the most recent example of new cooperative measures. In the last year, the Swiss have speeded up procedures for both legal assistance and extradition, extended assistance to new areas such as insider trading, and offered to tighten up banking regulations.
Other recent legal cases involving US-Swiss mutual assistance include:
The ``Lebanon Connection,'' a scandal being investigated by the Swiss with US help. It involves the laundering of $1 billion in drug-related money. In early April, one of the country's largest banks, Credit Suisse, was cleared by the Swiss Federal Banking Commission of wrongdoing for its role, but was criticized for lax supervision. The Commission plans to introduce tougher measures on bank note trading.
The Polar Cap affair, which came to light in February, is the biggest drug-money-laundering case ever investigated in the US. Swiss authorities were closely involved.
The Marcos investigation. Since the couple left the Philippines, the Swiss, at the request of the Filipino government, have investigated bank accounts here, including accounts reportedly opened by front men. The US has requested Swiss help in unraveling these transactions.
US investigations into the Iran-contra affair have also relied upon Swiss cooperation.
Still, efforts to work together have not always gone smoothly.
``The low point in our relations was the Marc Rich affair and the high point was the quick action on the part of the Swiss in arresting Khashoggi,'' says Michael Korff, chief information officer at the US Embassy in Bern.
FINANCIER Marc Rich fled the US for Switzerland in 1983. The Americans eventually requested his extradition for tax evasion, and the Swiss refused. While tax fraud is a felony in Switzerland, tax evasion is not. Americans accused the Swiss of moving too slowly and even trying to impede the case, while the Swiss accused the US of trying to exert undue pressure.
Meanwhile, insider trading was gaining attention in the US, and Americans again accused the Swiss of unhelpfulness on certain cases - while the Swiss pointed out that insider trading was not a crime under Swiss law.
``Judicial assistance has always been a major issue in our Swiss-American relations,'' retiring US Ambassador Faith Whittlesey told the International Bar Association last summer.
One problem for the US has been the fact that some financial transactions considered crimes in the US are not under the Swiss penal code, so extradition treaties between the two countries do not apply to them.
On the Swiss side, there has been fear that assistance requests would be misused to invade corporate or banking secrecy, both protected under Swiss law.
The 1987 agreement was designed to get over these hurdles. A significant step, from the American point of view, was the addition of a statement that the 1977 Mutual Legal Assistance Treaty covers insider trading.
``Assistance has improved. I think we could go further, others say we've gone too far, but there is a sense that crime has become so highly organized internationally that our international legal structures must become as highly developed,'' says law professor Christian Dominice at the Geneva Higher Institute for International Studies.