There is money, but no home. Switzerland has decided to tighten control over lawyers with atypical services

As is well known, Swiss lawyers enjoy an excellent reputation worldwide - clients can use them not only for wealth protection and tax optimization, but also for more dubious services. The fact is that, according to domestic law, when acting as "consultants", lawyers are not obliged to exercise due diligence.

But that was yesterday. Now the Federal Assembly (Swiss parliament) has proposed tightening the legislation so that the activities of "consultants" fall under the Anti-Money Laundering Act.

Public Eye reports on this .

The publication also names those who used “atypical” legal services, and among them are wealthy Kazakhs.

Indeed, in Switzerland there is a group of lawyers who, in addition to the “typical” activities of representing clients in court and providing legal advice, sell them a whole range of services that have nothing to do with law: from setting up companies to resolving administrative issues, as well as buying and selling real estate when the client is not interested in disclosing his name. And they are not, for example, obliged to study the motives of a rich person who wants to buy a network of offshore companies, or to ask where his wealth comes from.

Switzerland is an exception in this regard, as their counterparts in most neighboring countries, including Germany, France, Italy, have long been forced to conduct strict checks. Therefore, not only criminals, but also the powerful of this world have resorted to the services of Swiss lawyers.

The article mentions South African businessman Khulubuse Clive Zuma, the nephew of the President of the Democratic Republic of the Congo Jacob Zuma, a close friend of Russian President Vladimir Putin, cellist Sergei Roldugin, former Deputy Minister of Finance of the Russian Federation Vladimir Chernukhin, and billionaire and Russian senator from Dagestan Suleiman Kerimov.

Even very high-ranking Kazakhs were not immune to the temptation to conceal their deals – the article says that Swiss lawyers provided assistance to the families of both of the country’s presidents.

“In the 2010s, minister and diplomat Kassym-Jomart Tokayev, who was elected president of Kazakhstan in 2019, ran his underground business from Geneva through his son and nephew. The family turned to trusted lawyer Thierry Ullmann, who advised them on day-to-day management, registering companies in Switzerland, and overseeing real estate purchases. He also drafted the charter of the Tokayev family foundation, called the Innovative Diplomacy Foundation, which is now in the process of being liquidated,” the publication says.

As for the family of the first Kazakh president Nursultan Nazarbayev, his middle daughter Dinara Kulibayeva used the “atypical” services of Swiss lawyers. With their help, in 2009, she purchased real estate near Geneva for 74.7 million Swiss francs, and ten years later, another castle for 106 million francs.

"Master Jean-Christophe Hocke, a partner at the leading firm Python and later at Kellerhals Carrard in Geneva, has advised the super-rich family of Nursultan Nazarbayev, the president and undisputed master of Kazakhstan from 1991 to 2019, for decades. One of his tasks was to help his youngest daughter,   Dinara Kulibayeva, who has a residence permit in Switzerland, settle in Geneva.   In 2009, Dinara bought a property near Geneva for the astronomical sum of 74.7 million Swiss francs. Ten years later, she bought a castle in the region (106 million francs), "having fallen in love with it," as Maître Hocke explained  to the media at the time .

 

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Documents in our possession showed that the lawyer also helped two Kazakh citizens close to the Kulibayevs who wanted to buy property near Geneva. The pair did business with the retail giant Vitol,  our investigation found .

But soon the “Swiss shop” may close.

The Financial Action Task Force (FATF) intergovernmental organization demanded that Switzerland close the money laundering loophole back in 2005. But it was only in 2019 that an initial draft law was developed to extend the scope of anti-money laundering legislation to financial advisers. However, after two years of intense lobbying by the profession, the Swiss parliament refused to approve it in 2021.

We returned to this document after Russia’s full-scale invasion of Ukraine. Switzerland joined the EU initiative to impose sanctions against Russia, and closing loopholes in the anti-money laundering system became urgent from a reputational point of view.

“If the law is passed, lawyers will have to conduct a series of checks to identify the beneficial owner of the legal entities they register and manage. They will also have to explain the economic background and purpose of the services requested and preserve documentation. And if the answers are missing or unclear, lawyers must refuse to provide the services in question; otherwise, they risk criminal prosecution for potentially supporting illegal activity,” the Public Eye publication says.