Vladimiro Montesinos (Switzerland chapter)

In May 2023, a decision by the Swiss Federal Supreme Court cleared the way for the return of around USD 8.5 million in corruptly obtained assets to Peru. The money to be returned is part of a complex of cases linked to Vladimiro Montesinos, Head of Intelligence under former President Alberto Fujimori. It is a highly symbolic case for both Switzerland and Peru and sets an important precedent for the use of non-conviction based forfeiture laws to recover illicit assets. 

Peruvian prosecutors working with the International Centre for Asset Recovery were able to prove in court that the USD 8.5 million derived from corrupt contracts for the purchase of overvalued fighter jets from Belarus during Peru’s Fujimori government. The beneficial owner of the bank account was German-Israeli businessman Moshe Rothschild Chassin, an accomplice of Montesinos. He fled to Israel to evade prosecution and, despite being subject to an Interpol red notice, remains free. In 2021, after Peru’s Courts issued the confiscation order, the judicial authorities sent a mutual legal assistance request to the Swiss authorities to execute the confiscation order and return the money. Moshe challenged the confiscation order at all three appeals stages in Switzerland: in the Attorney General’s Office in Zurich, in the Federal Criminal Court in Bellinzona and in the Federal Supreme Court in Lausanne.(Source: "Switzerland to return USD 8.5 million to Peru in precedent-setting case of non-conviction based forfeiture", 17 May 2023, ICAR)

In 2020, Switzerland signed a trilateral agreement with Peru and Luxembourg on the restitution of illicitly acquired assets. The assets originate from acts of corruption in Peru. Cooperation with the Peruvian authorities enabled the confiscation of around USD 16.3 million in Switzerland and around EUR 9.7 million in Luxembourg. The assets from Switzerland and Luxembourg (a total of about USD 26 million) will be channelled into projects to strengthen the Peruvian courts, law enforcement and judicial authorities. They will be used to support the digitalisation, standardisation and harmonisation of procedures, for education and training of personnel and to accelerate the implementation of Peru's new Code of Criminal Procedure. (…) 

The story began in the early 2000s. Even before President Alberto Fujimori's government fell, some Swiss banks froze accounts belonging to Vladimiro Montesinos Torres, head of Fujimori's intelligence service, on their own initiative. The Public Prosecutor's Office of the Canton of Zurich opened criminal proceedings, ordered the freezing of accounts and immediately notified the Peruvian authorities, which drew up a number of mutual legal assistance requests based on the information received. A close judicial cooperation between the two countries was established, leading to the return of USD 93 million in total from Switzerland to Peru between 2002 and 2006. With further confiscation procedures concluded in Peru in this same context, returned additional assets amounting to approximately USD 16.3 million in 2020. 

(Source: Press Release, Federal Department of Foreign Affairs FDFA, 16.12.2020; “A dynamic Swiss policy on restitution of illicit assets”, FDFA, 16.12.2020)

An August 20, 2002 Swiss Federal Department of Justice press release stated that, "The account at Banco de la Nacion del Peru at Citibank in New York today received a credit of 77.5 million US dollars from Switzerland. This consisted largely of the blocked assets of Vladimiro Montesinos Torres and the former Peruvian general, Nicolas de Bari Hermoza Rios. The investigations carried out by the Examining Magistrate's Office IV Canton of Zurich revealed that the funds belonging to Montesinos that were frozen in Switzerland (totalling 49.5 million US dollars) originated from corruption-related crimes. Since 1990 Montesinos received "commissions" on arms deliveries to Peru and had this bribe money paid to his bank accounts in Luxembourg, the USA and Switzerland. Montesinos received bribes for at least 32 transactions, each worth 18% of the purchase price. Montesinos also collected 10.9 million US dollars in "commissions" on the purchase of three MIG29 planes, bought by the Peruvian airforce from the state owned Russian arms factory "Rosvoorouzhenie".

In return, Montesinos used his position to ensure that certain arms dealers were given preference when these orders were issued. On the basis of these facts, the Examining Magistrate's Office IV Canton of Zurich issued a decision on 12 June 2002 ordering the transfer of the assets belonging to Montesinos to Peru. This decision was not appealed and has since come into force. / Voluntary return / One of the arms dealers who enjoyed preferential treatment is voluntarily repatriating his commission from these transactions (7 million US dollars), hitherto held in Swiss bank accounts. General Nicolas de Bari Hermoza Rios also accepted bribes relating to arms deliveries to Peru. He too misappropriated funds from the military budget. All unlawfully obtained funds were ultimately paid into his bank accounts in Switzerland. Nicolas de Bari Hermoza Rios has agreed to this money (21 million US dollars) being returned to Peru."  The press release also stated that, "In the Montesinos case, assets totalling 33 million US dollars remain blocked in Switzerland." (Source:  Swiss Federal Department of Justice Press Release, "Switzerland transfers 77 million U.S. dollars to Peru," August 20, 2002.)