Swiss public prosecutor asked to charge UBS over laundering of Borneo logging corruption proceeds
Partners in crime: Sabah Chief Minister Musa Aman (left) and his "adoptive son" Michael Chia
(ZURICH/SWITZERLAND) Swiss bank UBS is likely to face criminal proceedings over its business ties with a Malaysian top politician following the filing of a complaint under criminal law by the Bruno Manser Fund, a rainforest advocacy group from Switzerland. The Bruno Manser Fund announced today that it has filed a complaint against UBS with Zurich's Public Prosecutor over the bank's ties with Musa Aman, a Malaysian politician who controls logging in Sabah, a Malaysian state in North Borneo. The complaint has been filed on behalf of the Bruno Manser Fund by professor Monika Roth, a lawyer and well-known Swiss compliance expert.
The Bruno Manser Fund accuses UBS of having breached its due diligence duties as defined by the Swiss Criminal Code and calls on Swiss authorities to take criminal action against UBS and those responsible for the bank's relationship with Musa Aman. The Malaysian politician has been Chief Minister of Sabah since 2003 and is the brother of Malaysia's Foreign Minister, Anifah Aman. He is being accused of having laundered over USD 90 million of corruption proceeds through a number of bank accounts with UBS in Hong Kong and Zurich. In April 2012, the Swiss Federal Office of Justice confirmed that Switzerland has given legal assistance to Hong Kong authorities over Musa's ties with UBS.
Numerous documents handed in as evidence to the Zurich Public Prosecutor's Office prove that Michael Chia, a close associate of the Sabah Chief Minister, organized large cash payments from timber companies with logging interests in Sabah to UBS bank accounts in Hong Kong. From the same accounts, payments have been made to Musa Aman's sons in Australia and to Mohd Daud Tampokong, a senior forestry official from Sabah.
The complaint alleges that Malaysian lawyer Richard Christopher Barnes, to whose accounts millions of US dollars were transferred, acted as a "shaker and mover" for the Sabah Chief Minister. By way of an example, on 21 August 2006, one of Barnes' accounts with UBS in Hong Kong was credited with USD 4.6 million paid only days earlier by Sabah timber tycoons into another UBS account controlled by Michael Chia.
"UBS plays a key role in everything, given that many of the relevant transactions in this case passed through this bank, and its employee, Dennis Chua, a former client advisor with HSBC in Hong Kong, was actively involved", the complaint states. "It is, however, evident that other financial institutions in Asia and possibly in Switzerland were involved in this mesh and indeed still are." The complaint also gives the account numbers of Musa Aman's personal bank accounts with UBS in Hong Kong and in Zurich.
"How UBS ought to handle banking relationships with politically exposed persons (PEPs) is stated in the law and the Swiss Financial Market Supervisory Authority's (FINMA) regulations. These rules were blatantly disregarded in that no suitable measures were taken for enforcing them. That makes UBS liable in accordance with the provisions of Art.102 para 2 and Art.305bis of the Swiss Criminal Code."
The Bruno Manser Fund is asking the Zurich Public Prosecutor to take action in Switzerland under Swiss law against UBS and against UBS employees who have disregarded their due diligence duties in the Musa Aman case. "Moreover, the question is to be asked whether the whole mesh of corruption is to be regarded as a criminal organisation, which would then be linked to the further question of whether the behaviour of UBS were not to be qualified as support for that organisation."
Corruption is one of the main drivers of deforestation in Sabah and Sarawak, the two Malaysian states on the island of Borneo. Borneo's rainforests are one of the world's biodiversity centres and home to endangered species such as the orang utan, the clouded leopard and the proboscis monkey. In 2007, the Malaysian government committed to protect its rainforests by signing the "Heart of Borneo" declaration but it has failed to take action against logging-related corruption by the Sabah and Sarawak state governments under their highly corrupt Chief Ministers, Musa Aman and Taib Mahmud.
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