Switzerland, U.S. Agree to Share Evidence

The Swiss and U.S. governments announced agreements Tuesday designed to allow for the smooth flow of evidence between the two countries in money laundering, insider trading and organized crime cases.

Swiss Justice Minister Elisabeth Kopp and Atty. Gen. Edwin Meese III signed a memorandum of understanding aimed at avoiding renewal of conflicts that have arisen in the past.

Several years ago, the Justice Department, without first holding extensive discussions with the Swiss, issued a subpoena for the records of Marc Rich, a Swiss fugitive indicted in the United States in a tax case involving an elaborate oil scheme. The agreement emphasizes prior consultation.

Disagreement on Jurisdiction

“Our disagreements arise over the limits of each country’s jurisdiction, or, to put it more bluntly, over the fact that some U.S. authorities seem to ignore such limits to their jurisdiction,” Kopp told reporters at a news conference.

“We cannot tolerate that the assistance channels that have been established, and which contain, quite intentionally, some safeguards against possible misuse, are bypassed,” she said.

Meese called the agreement “a significant event, underscoring the close and warm relationship our countries enjoy . . . we each acknowledge that, as is always the case, there exists room for improvement.”

The memo takes a broad view of organized crime, saying organized crime provisions of the 1977 Mutual Assistance Treaty between the two countries may apply to drug trafficking, counterfeiting, extortion, robbery and terrorism, all of which may involve money laundering.

Separately, the two countries exchanged diplomatic notes that will assist the U.S. Securities and Exchange Commission in gathering information from Swiss authorities in administrative proceedings in connection with prosecution of insider trading cases.

Not Yet an Offense

Insider trading is not yet a criminal offense in Switzerland, but an amendment to the Swiss penal code concerning insider trading is likely to go into force next year.

Kopp emphasized that the legal needs in criminal cases of the U.S. and Swiss justice systems must be balanced with the right to privacy represented by Swiss banking secrecy laws.

But she said Swiss banking secrecy “has never been an obstacle to the inquiries of a Swiss district attorney or investigative judge, and a banker could never . . . protect a suspected criminal client” by refusing to provide information.