(February 4, 2021): GENEVA - Foreign business head-quartered in Switzerland are rethinking their relationship with that country. This follows the Beny Steinmetz corruption court finding and newly invoked draconian measures, [URL=https://www.facebook.com/Blue-Note-Advocacy-101338385043801]Switzerland[/URL] is applying to corporations. Business leaders are questioning the advantages of maintaining a presence in a Swiss canton. The removal or relaxation of bank secrecy laws, aggressive anti-monetary procedures and a legal environment which is not business friendly, are factors that think tanks believe are reasons not to do business in Switzerland. Several foreign companies head-quartered in Switzerland, polled for this article, indicated that they were considering relocating their headquarters in other countries. Switzerland, once a safe haven for the wealthy and an attractive jurisdiction for head offices, could see massive capital outflows.
In January 2021, French-Israeli mining magnate Beny Steinmetz was convicted of bribery and corruption, in a Swiss court. The charge was that Steinmetz allegedly paid a wife of former-president of Guinea, Lansana Conté, $10 million. The payment ostensibly entitled Steinmetz to iron ore mining rights in Guinea, West Africa. Although there were never any direct payments by Steinmetz and he denies all the charges, the court found him guilty, lumping him with a $50.5 million fine together with a 5-year prison sentence.
Legal analysts accuse Switzerland of overreach and poaching, stating that the court decision suggest that Switzerland has much broader jurisdiction than the law permits. Claudio Mascotto, a senior prosecutor at the Office of the Geneva Attorney General has admitted that cross-border prosecutions are challenging. In an interview, he conceded that prosecutors push the envelope and legal boundaries which the law sets.
The Steinmetz charge is apparently a result of an aggrieved ruler, disenchanted by his predecessor’s wealth. For all intent and purposes, the Steinmetz case would never have started, if not for the former President’s demise.
The Steinmetz case underscores the question of legal enforceability for contracts that were procured with the incentive of a bribe. The reality is that if corruption and bribery were yardsticks for establishing legitimacy and enforceability of an agreement, eighty percent of African contacts would be invalid.
In Nigeria for example, a government tender requires that the bidding party articulate its bribe with the bid. That is the standard. It is the recognized way of doing business. In South Africa anyone biding for a government contact will tell you, that paying the bribe is fair game.
Business leaders believe Beny Steinmetz was a victim of the system. If Steinmetz directly or indirectly did in fact pay a bribe, he would be doing what in Africa is considered the norm. It’s the reason why a Swiss court had to domain the allegations against Steinmetz in Switzerland, a country which does not share the same business standards or ethical considerations as those in Africa.
ABOUT THIS ARTICLE:
A decision in a Swiss Court finding mining magnate Beny Steinmetz guilty of bribery and corruption sets a new legal precedent in the level of culpability that may be attributable to associated parties. An exodus of foreign capital is expected. Banks are set to cull African clients.
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