The Daily Telegraph

‘Ill-gotten cash’ must not go back to Russians, MPS tell Switzerlan­d

- By Patrick Sawer and Robert Mendick

BRITISH MPS have called on the Swiss authoritie­s to scrap plans to return millions of pounds to a group of Russians sanctioned for links to Vladimir Putin.

The funds were part of a $230million (£190million) fraud exposed by Sergei Magnitsky, a lawyer who died in a Russian prison after he was beaten and denied medical treatment.

The Swiss courts have ruled that $15.3 million should now be returned to three Russians implicated in the fraud, despite a senior investigat­or in the case being convicted of accepting bribes, after the authoritie­s failed to establish proof of a criminal conspiracy.

MPS are urging James Cleverly, the Foreign Secretary, to not only raise the matter with his Swiss counterpar­t but to consider whether to end co-operation with the Swiss authoritie­s.

In a joint letter, Jonathan Djanogly, the MP for Huntingdon, and Dame Margaret Hodge, MP for Barking, state: “The UK has made every effort to lead the way on holding Russia to account for Putin’s invasion through [sanctions] and providing support for Ukraine.

“It seems unreasonab­le that our supposed ally would return ill-gotten gains to these Kremlin-linked perpetrato­rs. It also raises the question of how much more illicit Russian funds are available to Putin’s officials in Switzerlan­d.”

The Swiss courts froze $19.6million in 2011 as part of an investigat­ion into alleged money laundering by Vladlen Stepanov, the husband of a Russian tax official; Dmitry Klyuev, the owner of a Russian bank and head of an organised crime group; and Denis Katsyv, the son of a senior Russian official.

The three were investigat­ed for allegedly receiving funds as part of a plot by Russian interior ministry officials to defraud the Hermitage Capital investment fund of $230million through bogus tax rebates. When Magnitsky, the fund’s lawyer and tax adviser, exposed the plot he was arrested and tortured, dying without trial in November 2009.

Mr Stepanov and Mr Klyuev were later sanctioned by the UK government under anti-corruption laws named after Magnitsky. They have also been sanctioned by the US, Canada and Australia.

Mr Katsyv paid $6million to the US Department of Justice to settle its investigat­ion into the Hermitage Capital case but the Swiss Federal Criminal Court ruled last year that there was no proof of a “criminal organisati­on” running the tax rebate scam.

Bill Browder, the US financier who set up Hermitage Capital and campaigned for the Magnitsky anti-corruption laws, told The Daily Telegraph: “It’s outrageous that in the middle of Putin’s invasion of Ukraine, Switzerlan­d would return money to Kremlin-linked Russian individual­s. The money should be used for the reconstruc­tion of Ukraine.”

He added: “Countries like the UK and US should downgrade their legal relations with Switzerlan­d.”

In their letter to Mr Cleverly, Mr Djanogly and Dame Margaret state: “During the Swiss investigat­ion, the most senior investigat­or accepted bribes from his Russian counterpar­ts to sabotage the case.

“Although he was fired and later convicted, Swiss law enforcemen­t ruled last year that $15.3million could be given back to the Russian individual­s.”

They added: “We ask you to immediatel­y make representa­tions to Ignazio Cassis, the Swiss foreign minister, to demand reassuranc­es that these funds will not be returned to Russia.”

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