Swiss Prosecutors Close Magnitsky Case

  • The Swiss Criminal Court closed the Magnitsky criminal case.
  • Magnitsky was tortured and died in custody.
  • In memory of his death, the US congress passed the Magnitsky Act.

Swiss Prosecutors dismissed a nearly decade-old money laundering case brought by Sergei Magnitsky, a Russian tax advisor who worked with Hermitage Capital founder Bill Browder. Magnitsky was arrested on fraud allegations in 2008 and died of “untreated illness” within a year in custody.

Sergei Magnitsky was a Russian tax advisor. His arrest in 2008 and subsequent death after eleven months in police custody generated international media attention and triggered both official and unofficial inquiries into allegations of fraud, theft and human rights violations in Russia.

According to the reports, he was tortured and denied medical treatment. The reason for his arrest was his findings of corruption within the Russian government. The case, SV. 11. 0049-LAM, was dismissed earlier this month. The case started in March 2011.

The criminal case was initiated by the Browder team of lawyers on the grounds that someone was “involved in the fraudulent seizure of funds from the Russian Treasury, by falsifying tax refunds to the accounts of Russian companies, allegedly for several months ‘stolen’ from the Hermitage Fund, which belonged to Browder.”

At one time, Hermitage Capital was the largest foreign portfolio investor in Russia. Browder was also known to be a foe of Russian President Vladimir Putin.

The evidence and statements were provided by Browder against the Russian/Israeli businessman Denis Katsyv and four Russian companies. Katsyv is based in Moscow and is the owner of Prevezon Holdings Limited.

The case became the catalyst for the Magnitsky Act, which was passed five years after the Swiss criminal case was initiated by the US Congress. Thus allowing the US government to impose sanctions on foreign government officials who are involved in human rights violations around the globe.

After the US passed the act, Canada, the United Kingdom, Estonia, Latvia, Lithuania, Jersey and Gibraltar enacted similar acts. Additionally, last December, the European Union (EU) announced the beginning of the development of a Human Rights sanctions regime that would be similar to the Magnitsky Act in the US.

The Magnitsky Act, formally known as the Russia and Moldova Jackson–Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act of 2012, is a bipartisan bill passed by the U.S. Congress and signed into law by President Barack Obama in December 2012, intending to punish Russian officials responsible for the death of Russian tax lawyer Sergei Magnitsky in a Moscow prison in 2009 and also to grant permanent normal trade relations status to Russia.

The document, dated November, 6, 2020, states the investigation has been halted. The criminal case was closed due to lack of evidence. Nevertheless, the Swiss court is willing to accept the documentation proving losses as the result.

It is plausible that Browder will not be thrilled with the case closure. It is expected Browder will make a statement pertaining to the case closure soon.

Even though the Russian government’s handling of the opposition is questionable, when investing in Russia, there are high risks associated with this. What is surprising is that everyone besides France and Greece seem to be ignoring the human rights violations and deaths that happen in Turkey.

However, the US and EU believe that Magnitsky uncovered the funds that were hidden by the Russian government official in Switzerland. The Act is much needed and it is important for the West to monitor the human rights abuses that happen in Russia.

Recently, another opposition member has been found dead in the Russian jail. According to his family, he was severely tortured and died.

Overall, even though the criminal case case been closed, it allowed the West to learn what happens in Russia. Also, Magnitsky’s death has not been forgotten, and as a result of his death, the Magnitsky Act has been passed.

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Christina Kitova

I spent most of my professional life in finance, insurance risk management litigation.

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