Swiss bank giant accused of laundering timber money
Trucks loaded with illegally logged tropical timber, photographic evidence from Sabah (© BMF)
In the Malaysian state of Sabah, the Chief Minister and his ruling family are systematically lining their pockets with the spoils of tropical deforestation. The money from the illegal trade was laundered through the accounts of UBS, a major Swiss bank. Urge UBS to put an end to its unsavory business relationship with the timber mafia.
News and updates Call to actionTo: Sergio P. Ermotti, CEO UBS Group
“UBS must refrain from money laundering for illegal logging operations.”
Sabah is a state in Malaysian Borneo covered by an extensive network of protected areas. Its tropical forests are home to rare species such as Borneo pygmy elephants, Sumatran rhinos and orangutans. But its natural environment is in jeopardy. Sabah has been governed by Musa Aman since 2003. According to research by the Malaysian Anti-Corruption Commission (MACC), Chief Minister Musa Aman and his family are systematically lining their pockets with the spoils of deforestation in Borneo.
As MACC discovered, Chief Minister Aman collected millions in bribes for allowing logging companies to cut down rainforest plots. As early as 2007, the commission came across 5,000 illegally felled logs from protected areas. Its investigation determined that senior members of the government are involved in the scandal. Musa’s brother is the Malaysian foreign minister, while the attorney general is a close family friend. Although the evidence is overwhelming, no charges have been brought to date and MACC’s work has been obstructed repeatedly. The investigations have also been impeded by the Swiss bank UBS.
According to the Swiss Newspaper „Handelszeitung“, the UBS AG branch office in Singapur accepted cash cheques of 15 million Dollars from a close associate of Musa Aman. “With this transaction, UBS violated internationally recognized standards intended to combat money laundering”, as the Swiss Bruno Manser Fund noted in a statement. “We have therefore prompted the finance police and banking supervisory authorities in Singapore and Switzerland to initiate investigations against the two banks.”
Please urge the UBS board to cooperate with the authorities and put an end to its unsavory business relationship with the tropical-timber mafia.
BackgroundSince 2007 the MACC (Malaysian Anti-Corruption Commission) has been investigating Musa Aman on allegations of illegal trade in tropical timber, corruption and money laundering. Documents handed in as evidence to the Zurich Public Prosecutor's Office, proved Micheal Chia of being the central figure in the affair. Chia is a close associate of Musa and his family. The cunning Chia acted as a middle man, giving grants for illegal tropical hardwood logging concessions and paying kickbacks onto the accounts of Musa and his family.
Also strongly suspected of playing a leading role in the affair is Richard Christopher Barnes, a Sabah lawyer, who acted as a "shaker and mover" for Musa Aman. Chia and Barnes were interrogated in 2010 and both made extensive confessions. Because of these confessions, enough proof was secured, that 40 different charges could be held against Musa Aman. However, any effort from the side of the MACC to bring Musa and his family to court were blocked by Attorney General Abdul Gani biin Patail. He is a relative of Musa and a close family friend.
Bruno Manser Fund files a criminal complaint against UBS
Musa Aman´s UBS Swiss bank account plays the key role in the affair. Altogether more than 70 million Euro kickbacks from the illegal trade of tropical timber have supposedly been laundered over this bank account. According to the findings of the Swiss Bruno-Manser-Fonds (BMF) there are more bank accounts involved that exist for the purpose of legalizing money from the tropical timber Mafia. Because of this, the BMF demands the UBS to freeze the bank accounts of further 46 Malaysian politically exposed persons (PEP).
In spring 2011, the Swiss Federal Office of Justice already gave legal assistance to the Hongkong authorities whilst they were investigating against Musa Aman. The documents handed in as evidence to the Zurich Public Prosecutor's Office prove that Michael Chia, managed large cash payments from timber companies with logging interests in Sabah to Musas lawyer (Barnes), his two sons living in Australia and to forestry officials in Sabah. For that reason the BMF filed a criminal complaint against the UBS over the laundering of proceeds of corruption.
Deforestation in biodiverse ecosystems
On the basis of the existing documents and pieces of evidence, proof is given that because of Musa Amans´ illegal logging concessions, 15.000 hectares of primal rainforest has been clear cut. This includes forests in areas of conservation in the National Park. After deforestation Musa gave his approval for the partial cultivation of palm oil plantations on the clear cut areas. The rainforests of Borneo are especially biodiverse and give home to many endemic species. Extensive forest clearance in these sensitive ecosystems causes severe damage to the environment.
The trade with illegally logged timber in Sabah is less an exception and rather a system. In the neighboring state Sarawak the governor Taib Mahmud has been ruling for nearly 30 years. He is known as being primarily responsible for the rapid logging of the rainforests in Sarawak. Also Taibs ruling family is involved in the global network of corporations and offshore financial centers, that help laundering the kickbacks from illegal tropical timber trade.
Just because it´s legal it´s not environmentally friendly
In the attempt to set boundaries to the tropical timber Mafia, the USA has introduced an interdiction of commerce on illegal wood imports, the EU has set itself this goal for 2013. However, the practical experience will show whether the prohibition will work or not. The successful implementation depends on many variables. “Currently nothing is known to us about confiscation and investigation in Germany and the EU, although according to the data of EU, Worldbank, Interpol and others, a considerable amount of timber traded with – millions of tonnes per year – , is the result of illegal logging”, says forest campaigner Klaus Schenck from Rainforest Rescue.
The interdiction of commerce is only the very first step towards saving the forests of our earth. Because making deforestation legal doesn´t mean it is environmentally friendly or without impact on social communities. The best example are huge timber concessions given to the logging industry by governments, e.g., European logging companies in the rainforests of the Congo or the logging in Russia for Ikea.
To: Sergio P. Ermotti, CEO UBS Group
Dear Mr. Ermotti,
Documents of the Malaysian Anti-Corruption Commission (MACC) and the Swiss Bruno Manser Fund (BMF) indicate that UBS has managed the bank accounts of Musa Aman. The MACC has been investigating Aman, the Chief Minister of the Malaysian state of Sabah, for years on allegations of illegal trade in tropical timber, corruption and money laundering. The Chief Minister’s illegal activities are endangering one of the planet’s most diverse ecosystems.
A further shocking aspect of the Musa Aman case is that the corrupt politician allegedly laundered over US $90 million in bribes from logging companies through UBS accounts in Hong Kong. He also maintained an account at UBS in Zurich.
Documents available to the BMF pertaining to the case indicate that the money laundering via UBS was only possible due to gross violations of legal due diligence on the part of the bank. In late May, the BMF therefore filed a criminal complaint with the Zurich public prosecutor’s office against UBS for lack of safeguards against money laundering.
As UBS states on its website, your company intends to “take part in the fight against money laundering, corruption and the financing of terrorism”.
To this end, I call on you to cooperate with the Swiss and Malaysian authorities in their investigations of Musa Aman. Furthermore, I urge you to freeze the accounts of Musa Aman, his family members, and the companies associated with them, and to publicize UBS’s internal policy on customers in the timber industry. I encourage UBS to comply with self-imposed and statutory standards of due diligence and avoid questionable business relationships with demonstrably corrupt politicians and destroyers of the environment.
These measures would not only facilitate government investigations of Musa Aman, they would also enhance the public image of UBS.
Sincerely,
Recent successes