The Frigate Affair: Legal assistance is granted to Chinese Taipei
Bern, 27.10.2005 - The Federal Council has denied that granting legal assistance to Chinese Taipei, France and Liechtenstein violates Switzerland's essential interests. It is in Switzerland's best interests that its financial centre is not used for criminal purposes and to contribute to improving the transparency of business transactions in the important financial centres.
Background
Criminal proceedings were opened in Switzerland, France, Liechtenstein and Chinese Taipei linked to the conclusion of a contract concerning the sale of frigates between Chinese Taipei and a state-owned French company in 1991, relating in particular to money laundering, lack of due diligence in financial transactions, forgery of documents, murder and participation in a criminal organisation. In 2001 and 2002, Switzerland received applications for legal assistance from France, Liechtenstein and the Taiwanese authorities. Based on these applications, the Federal Examining Magistrate ordered the sequestration of frozen funds amounting to approximately USD 495 million and authorised the forwarding of bank documents to France, Liechtenstein and Chinese Taipei by virtue of a decision taken on 28 November 2003. Mr. Andrew Wang, suspected of being the main protagonist in this matter, filed an appeal under administrative law with the Federal Supreme Court in which he sought the annulment of this decision. At the same time, he addressed the Federal Department of Justice and Police (FDJP) pointing out that the granting of legal assistance would be detrimental to Switzerland's essential interests. Mr. Wang lodged an administrative appeal against the negative decision of the FDJP with the Federal Council.
In its rulings of 3 May 2004, 19 April and 20 September 2005, the Federal Supreme Court dismissed the appeal under administrative law of Mr. Wang and granted legal assistance.
By decision of 26 October 2005, the Federal Council has denied any violation of Switzerland's essential interests and dismissed the administrative appeal of Mr. Wang. In its view, given the fact that criminal proceedings have been opened by three countries (including Switzerland) and by the Taiwanese authorities, to examine a complex series of events against a backdrop of serious international corruption, Switzerland should not refuse to lend its support to the investigation underway. Indeed it has every interest in ensuring that Switzerland's financial centre is not used for criminal purposes and that it contributes to improving the transparency of commercial transactions in the major financial centres such as those in France, Liechtenstein, Chinese Taipei and Switzerland.
No recognition of the island of Taiwan by Switzerland
Legal assistance is a legal instrument the use of which is not restricted solely to states. On the one hand, Swiss law permits Switzerland to grant legal assistance to an entity other than a state, providing that this entity has actual power and is in a position to fulfil all legal requirements. This is the case for the island of Taiwan, given that its authorities have jurisdiction within the territory of the island and that they are in a position to enforce the law with regard to the population.
On the other hand, in accordance with International Law, a state may grant legal assistance to a non-state entity without this actually entailing implicit recognition of the latter, providing that the state clearly expresses its wish not to recognise that entity. For the Federal Council, the granting of legal assistance to the island of Taiwan does nothing to alter its One China policy, which it has pursued consistently since 1950, and considers the People's Republic of China to be the sole representative of the Chinese state.
Address for enquiries
Barbara Schaerer, Federal Finance Administration, Tel.: 031 3226018
Publisher
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html
