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PACE in Strasbourg has been reviewing Switzerland\u2019s handling of the Magnitsky case <\/p>\n
SWI swissinfo.ch <\/p>\n
Switzerland\u2019s controversial handling of the Magnitsky Affair, a vast Russian money-laundering scheme, is back in focus. The Parliamentary Assembly of the Council of Europe is preparing a resolution critical of Switzerland\u2019s response, while the Swiss Federal Court has ruled a central part of the case unconstitutional.\n<\/p>\n
This content was published on <\/p>\n
April 18, 2026 – 10:00\n<\/p>\n
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\n I cover international relations with a focus on Switzerland, lead journalistic investigations, and conduct deeply personal interviews on challenging topics.
\nOver 25 years in journalism. Graduated from Moscow State University’s Faculty of Journalism and the French Press Institute in Paris. Former TV\/radio host in France and Russia. I am a published author and documentary filmmaker who has interviewed presidents and rock stars. <\/p>\n
On April 22, the Parliamentary Assembly of the Council of Europe (PACE) in Strasbourg is expected to vote on a resolutionExternal link<\/a> critical of Switzerland\u2019s handling of the Magnitsky affair, a vast cross-border money-laundering operation involving many high Russian officials.External link<\/a> The fraud involved $230 million (CHF183 million) stolen from the Russian Treasury as illegal tax refund. It was uncovered by Sergei MagnitskyExternal link<\/a>, a lawyer representing his client Hermitage Capital Management, then the biggest portfolio investor in Russia. Magnitsky was found dead while in Russian custody after testifying in the case. His death led to a series of international investigations and sanctions on Russian citizens.<\/p>\n How to steal $230 million from the Russian Treasury\u00a0\u00a0 <\/p>\n The techniques to embezzle funds used in the Magnitsky case were described in depth by journalists at Novaya Gazeta, a Russian media outlet, and at the OCCRP, an international consortium of journalists.\u00a0<\/p>\n Russian police officers confiscated documents and the corporate seals of the Russian subsidiaries of the Hermitage Fund, a British investment company, and then used them to re-register ownership under another name. Subsequently, a series of other dummy shell companies, controlled by the same individuals, presented fictitious financial claims against the stolen \u201csubsidiaries\u201d of Hermitage Fund. Playing the role of both plaintiff and defendant, they convinced Russian arbitration courts to issue rulings that resulted in massive losses on paper, completely nullifying the original income. Then, armed with documents \u201cproving\u201d that the company had not made any profit, the perpetrators filed an official claim for a reimbursement for $230 million, which had previously been paid to the Russian Treasury in the form of income tax. The money obtained in this way was then transferred out of the country through a web of offshore accounts.\u00a0<\/p>\n The draft resolutionExternal link<\/a>, seen by Swissinfo, was unanimously approved by PACE\u2019s Committee on Legal Affairs and Human Rights on January 27, 2026. It criticises the Swiss authorities\u2019 conclusions of the case.\u00a0<\/p>\n PACE is one of the two statutory bodies of the Council of Europe. It is the organisation\u2019s parliamentary arm tasked with promoting human rights, democracy and the rule of law. Switzerland is represented in PACE and takes part in its work. While PACE resolutions are non-binding, they carry political weight and can shape international debate.\u00a0<\/p>\n The resolution by PACE raises broader questions: is Switzerland\u2019s justice system in line with international norms? And why does a case closed by Swiss prosecutors more than four years ago still trigger controversy abroad?<\/p>\n At stake is more than the fate of frozen funds. The dispute goes to the heart of how legal standards are applied in complex cross-border money-laundering cases <\/a>and how Switzerland\u2019s approach compares with that of other jurisdictions.<\/p>\n How it all started<\/p>\n In\u00a02011, Hermitage Capital filed a\u00a0criminal complaint in Switzerland. The Swiss case became one of\u00a0the first international investigations initiated by\u00a0Hermitage into the laundering of\u00a0proceeds from that fraud. It\u00a0was followed by\u00a0multiple investigations including in\u00a0the United States, France, Spain, the Netherlands, Luxembourg and the Baltic countries.<\/p>\n Denis Katsyv, son of\u00a0a\u00a0senior Moscow-region official. <\/p>\n DM <\/p>\n Swiss authorities froze about CHF18 million ($22.6 million) held in\u00a0bank accounts controlled by\u00a0three Russian citizens that had benefited from the fraud: Vladlen Stepanov, then husband of\u00a0the Russian tax official Olga Stepanova, who authorised the illegal tax refund; Denis Katsyv, son of\u00a0a\u00a0senior Moscow-region official; and Dmitry Klyuev, a\u00a0Russian banker previously convicted in\u00a0Russia.<\/p>\n Dmitry Klyuev, a Russian banker previously convicted in Russia. <\/p>\n OCCRP <\/p>\n In\u00a0July 2021 Switzerland\u2019s Office of\u00a0the Attorney General (OAG) formally closed its decade-long money-laundering investigationExternal link<\/a>, stating that it had \u201cestablished a link between some of the assets under seizure in Switzerland and the predicate offence committed in Russia\u201d but had \u201cnot revealed any evidence that would justify bringing charges against anyone in Switzerland\u201d.\u00a0<\/p>\n It ultimately confiscated CHF4 million on the grounds that the money was linked to the fraud, while releasing the remaining CHF14 million back to the accountholders.\u00a0<\/p>\n Hermitage Capital challenged the decision in the Swiss courts. In January 2025 the Federal Court dismissed its final appealExternal link<\/a>, exhausting the company\u2019s remaining domestic remedies in Switzerland.<\/p>\n The decision to return around 75% of the frozen funds to the Russian account holders drew international criticism from human rights organisations, international lawyers and lawmakers.<\/p>\n In July 2023, the US Helsinki Commission called for sanctions against former Attorney General Michael Lauber over Switzerland\u2019s handling of dirty Russian money in the Magnitsky affair.<\/p>\n Anthony Anex \/ Keystone <\/p>\n In July 2023, the US Helsinki Commission, a congressional body that promotes human rights and security, \u201cexamined Switzerland\u2019s poor track recordExternal link<\/a> of rooting out dirty Russian money\u201d and called for sanctionsExternal link<\/a> against three Swiss officials in connection with the affair, including former Attorney General Michael Lauber and a former federal prosecutor.\u00a0<\/p>\n Questions were also raised about the conduct of officials involved and about links between Russian interests and the OAG. Vinzenz Schnell, a Swiss investigator involved in high-profile Russia-related probes, was later convicted by a Swiss court for \u201caccepting an undue advantage\u201dExternal link<\/a> from a Russian side while he was working on Russia-linked investigations, including the Magnitsky case.\u00a0\u00a0<\/p>\n The OAG rejected all the accusations and demands for sanctions.<\/p>\n Officially, the investigation was closed. Yet the case continued to generate controversy abroadExternal link<\/a>. Politicians in the UK and the US have criticised this decision. \u00a0<\/p>\n Counting the money<\/p>\n At the heart of the controversy to return the majority of frozen funds was the method used by the Swiss prosecutors to calculate how much of the funds should be confiscated.\u00a0<\/p>\n Using what they called a \u201cproportional calculation method\u201d, the OAG concluded that only CHF4 million of the funds that were frozen could be permanently confiscated. The remaining, prosecutors said, could not be definitively traced to the Russian Treasury and were therefore released.<\/p>\n That interpretation and the release of the bulk of the money later became the central point of legal and political dispute.<\/p>\n The approach was based on the idea that the original proceeds had allegedly been diluted through successive layers of financial transactions. At each stage of \u201clayering\u201d, prosecutors estimated what share of the funds could still be traced to the predicate offence and reduced the confiscation amount accordingly.<\/p>\n Switzerland is represented in PACE and takes part in its work. <\/p>\n Keystone \/ Anthony Anex <\/p>\n While Swiss prosecutors defended their method, legal observers both in Switzerland and abroad noted that such a calculation is rarely used in major international money-laundering cases. In those cases, courts more often focus on the overall illicit origin of funds, rather than attempting to mathematically segment their transformation through complex financial chains.<\/p>\n Mark Pieth, a former member of the G7\u2019s Financial Action Task Force and former head of economic and organised crime at the Swiss Federal Office of Justice, has publicly questioned the broader implications of this interpretation.\u00a0\u201cIf what the prosecutors are saying [the method] is correct, then we [Switzerland] would be the paradise for money laundering. Maybe we are the paradise for money laundering,\u201d he told Swissinfo in an earlier interview.\u00a0 \u201cIf there are indicators that this money stems from an illegal source, then it has to be blocked,\u201d he added.\u00a0\u00a0<\/p>\n Who counts as a victim<\/p>\n The dispute was not only about how much money could be confiscated. It was also about who counted as a victim. The OAG\u2019s decision also differed from other jurisdictions by removing Hermitage Capital from the proceedings as an \u201cinjured party\u201d, thereby depriving it of the right to challenge the outcome.<\/p>\n Prosecutors argued that the sole victim of the fraud was the Russian Treasury, an assessment aligned with the position of Russian authorities. The US Department of Justice treated the case as part of a broader transnational fraud and money-laundering scheme, recognising Hermitage as a victim. External link<\/a>French authorities adopted a similar approach.<\/p>\n >>Read our investigation, cited in the PACE resolution and selected for the preliminary shortlist of the European Press Prize<\/p>\n \n More<\/p>\n More <\/p>\n Foreign Affairs\n <\/p>\n Magnitsky case:\u00a0 How Switzerland failed to investigate Russian millions\u00a0 <\/p>\n This content was published on <\/p>\n Jun 27, 2024 <\/p>\n An in-depth investigation by SWI swissinfo.ch looks at why and how millions in allegedly illicit money from a global Russian tax fraud case were not investigated in Switzerland. <\/p>\n <\/p>\n Read more: Magnitsky case:\u00a0 How Switzerland failed to investigate Russian millions\u00a0 International scrutiny and the role of PACE<\/p>\n The controversy over Switzerland\u2019s handling of the case did not remain confined to the courtroom. It soon became the subject of international parliamentary scrutiny in Strasbourg at the PACE.<\/p>\n PACE\u2019s engagement in the Magnitsky affair dates back to January 2013 when the Assembly began examining the tax fraud and Magnitsky\u2019s death, including how and where the proceeds were laundered.\u00a0<\/p>\n In 2016, the Swiss politician Andreas Gross, who wrote a report on Magnitsky\u2019s death for the Council of Europe in 2013-2014, was summoned for questioning by the Swiss prosecutor\u2019s office. <\/p>\n KEYSTONE\/Peter Klaunzer <\/p>\n The Committee on Legal Affairs and Human Rights appointed its rapporteur at the time, Swiss parliamentarian Andreas Gross, and authorised fact-finding visitsExternal link<\/a> to Moscow, London, Nicosia in Cyprus and Bern.<\/p>\n Gross first travelled to Moscow in early 2013 to hear the official position of the Russian authorities and then held discussions with the Swiss Attorney General and his deputy. He also met officials in Cyprus, where part of the proceeds had reportedly been channelled through offshore structures.<\/p>\n The mission resulted in a reportExternal link<\/a> and resolutionExternal link<\/a> calling on the competent Russian authorities to fully investigate the circumstances and background surrounding Magnitsky\u2019s death and to cooperate with authorities in several European countries, including Switzerland, on the ongoing money-laundering investigations linked to the fraud. <\/p>\n Estonian parliamentarian Eerik-Niiles Kross tabled a motion for a resolution, aimed at triggering a new inquiry into Switzerland\u2019s decision to release most of the frozen funds. <\/p>\n Henrik Montgomery \/ AFP <\/p>\n A decade later, PACE returned to Switzerland\u2019s role in the case. In April 2024, Estonian parliamentarian Eerik-Niiles Kross tabled a motion for a resolution, External link<\/a>aimed at triggering a new inquiry into Switzerland\u2019s decision to release most of the frozen funds. In October 2024, PACE appointed Ukrainian parliamentarian and lawyer Lesya Vasylenko as special rapporteurExternal link<\/a> to prepare a report and draft resolution on the issue.\u00a0<\/p>\n \u201cProceeds of the crime denounced by Sergei Magnitsky found in Switzerland must not be returned to the presumed perpetrators,\u201d Kross said to Swissinfo, when asked what Switzerland could have done to better fight money laundering.<\/p>\n PACE rapporteurs routinely conduct fact-finding missions in member states as part of the Assembly\u2019s oversight work, for example in HungaryExternal link<\/a>, GeorgiaExternal link<\/a>, AzerbaijanExternal link<\/a>, RomaniaExternal link<\/a> or TurkeyExternal link<\/a>.\u00a0 In that sense, a mission focused on Switzerland is not unusual.\u00a0<\/p>\n A cold welcome<\/p>\n In March 2025, Vasylenko travelled to Switzerland on a PACE fact-finding mission. During her one-day visit in Bern, she was scheduled to meet Swiss parliamentarians and officials from the foreign ministry.<\/p>\n She told Swissinfo that her official visit to Bern had not been without \u201ctension\u201d.\u00a0During discussions with some parliamentarians, she encountered what she described as \u201cstrong\u201d and, at times, \u201cinappropriate\u201d reactions from members of the Swiss delegation at PACE. Swiss media coverage at the time reflected a defensive reaction from some members of the Swiss delegation, with criticism directed at the draft report and at Vasylenko personally, even though the final report hadn\u2019t been published yet.\u00a0<\/p>\n The foreign ministry also commentedExternal link<\/a> on the visit: \u201cSwitzerland has a robust system of safeguards against illegal funds.\u201d<\/p>\n A new turn of events\u00a0<\/p>\n In December 2025, the Swiss Federal Court issued a decision rejecting the proportional methodExternal link<\/a> that had underpinned the OAG\u2019s calculations in the Magnitsky case, finding it incompatible with Swiss law \u2013 a rulingExternal link<\/a> that called into question the rationale used to release most of the frozen assets.\u00a0<\/p>\n The ruling arose from an appeal brought by Katsyv, one of the Russian citizen whose assets were confiscated, and his affiliated companies after the Federal Criminal Court upheld the OAG\u2019s 2021 closure order in February 2023External link<\/a>.<\/p>\n Katsyv\u2019s companies were central to the Swiss case because their Swiss accounts had been frozen as suspected channels for laundering proceeds of the fraud.\u00a0The Swiss Federal Court ordered a new calculation of the compensatory claim against it using one of two alternative methods: the \u201cintentional corrective\u201d method or the \u201cresidual\u201d method, also referred to as \u201csedimentation\u201d.<\/p>\n >>Read our new investigation into Denis Katsyv, who withdrew funds he held at Swiss bank UBS and transferred most of these to banks in Israel and Armenia. The report shows a recent Swiss Federal Court ruling could have led to the confiscation of some of those funds.<\/p>\n \n More<\/p>\n More <\/p>\n Foreign Affairs\n <\/p>\n Millions of dollars linked to Magnitsky fraud case leave Switzerland\u00a0\u00a0 <\/p>\n This content was published on <\/p>\n Apr 18, 2026 <\/p>\n A Russian citizen who held funds in Switzerland linked to a global tax fraud case wired at least CHF6 million from his UBS accounts. Our investigation shows a recent court ruling could have led to the confiscation of some of those funds. <\/p>\n <\/p>\n Read more: Millions of dollars linked to Magnitsky fraud case leave Switzerland\u00a0\u00a0 Under the intentional corrective method, the focus is on whether the account holder intended to launder criminal proceeds. If that intent is established, the full amount in the account may be subject to confiscation.\u00a0<\/p>\n The sedimentation method is more restrictive and targets the funds directly linked to illicit transactions. The Federal Criminal Court now has to reassess the size of the state\u2019s compensatory claim according to the decision of the Federal Court.\u00a0<\/p>\n This decision is important as it will shape future rulings on confiscating funds linked to international fraud.<\/p>\n Damien Cottier, member of the Swiss House of Representatives and of PACE. <\/p>\n Anthony Anex \/ Keystone <\/p>\n \u201cThe calculation method had never before been definitively addressed by the country\u2019s highest court,\u201d said Damien Cottier, member of the Swiss House of Representatives and of PACE, adding the ruling establishes a new jurisprudential framework binding on lower authorities and courts.\u00a0The PACE draft resolution, approved by the Committee on Legal Affairs and Human Rights, and the report \u201cwelcomed the Federal Court decision\u201d.\u00a0<\/p>\n Behind the scenes in Strasbourg<\/p>\n In January 2026, Vasylenko presented her report and an initial draft resolution to PACE\u2019s Committee on Legal Affairs and Human Rights.\u00a0Sources in Strasbourg told Swissinfo that the text was met with criticism from some members of the Swiss delegation, who argued that it misrepresented Switzerland\u2019s judicial approach to the case.\u00a0<\/p>\n In the following days, efforts by different parliamentarians led to a revised version of the draft that was noticeably softer in its assessment of Switzerland.<\/p>\n Cottier told Swissinfo that comparisons with foreign investigations were often misleading. \u201cNational judicial systems differ considerably. In the United States, the case was resolved through an out-of-court settlement, without a conviction, which is not possible in Switzerland,\u201d he said.\u00a0This version was in turn criticised by some European parliamentarians during the Committee\u2019s hearings for not fully representing Switzerland\u2019s responsibility in returning funds linked to an international fraud.\u00a0<\/p>\n PACE appointed Ukrainian parliamentarian and lawyer Lesya Vasylenko as special rapporteur to prepare a report and draft resolution on the issue.\u00a0 <\/p>\n Paul Ellis \/ AFP <\/p>\n The final draft resolution integrates some of the amendments proposed by one of the members of the Committee.\u00a0The adopted text now highlights that authorities in the US and France concluded the fraud and subsequent laundering were carried out by a criminal organisation involving Russian government officials \u2013 a conclusion that contrasts with the Swiss prosecutors\u2019 assessment that they could not establish the involvement of a criminal organisation.\u00a0<\/p>\n That distinction matters under Swiss law. If money launderingExternal link<\/a> is linked to a criminal organisationExternal link<\/a>, different rules apply: instead of prosecutors having to prove that the assets are criminal, suspects must demonstrate that their funds have a legitimate origin. This also means assets linked to a criminal organisation can be fully confiscated, rather than partially released, as happened in the Swiss case.<\/p>\n The parliamentarians also stated in the resolution that the Swiss investigation had been overshadowed by serious allegations that officials involved had accepted undue favours from senior Russian figures.\u00a0It includes recommendations for the Swiss judicial system including expanding confiscation without a criminal conviction and changing national legislation External link<\/a>accordingly.\u00a0<\/p>\n Vasylenko told Swissinfo that the strength of the Assembly lies in its ability to bring different positions together and agree on language that reflects shared values while remaining acceptable to national authorities. \u201cSometimes that means toning down certain formulations,\u201d she said. \u201cAt the end of the day, what matters is the principle and that the words in the report lead to action.\u201d<\/p>\n What\u2019s next?\u00a0<\/p>\n
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