CHF 900 million held in French-Taiwan arms deal scandal

11 April 2008

BERN – Swiss authorities said on Thursday that CHF 903 million  (USD 900 million) belonging to Taiwanese citizens remained frozen in Swiss bank accounts linked to the alleged corrupt sale of six French frigates to Taiwan in the 1990s.

Examining magistrate Paul Perraudin confirmed the amount nearly double what was previously reported. He said he would consider unfreezing the money if a Taiwanese court rules on whether the money was from corrupt payments and if it should be confiscated.

The case concerns allegations that French firm Elf Aquitaine paid bribes to persuade French authorities to approve the CHF 2.7 billion (USD 2.7 billion) sale of six frigates to Taiwan in 1991 and to encourage Taiwan to buy them.

Swiss authorities first disclosed in 2001 that millions of dollars in suspected bribe payments had been blocked in Switzerland. The total sum was never disclosed, but was believed to be about CHF 521.5 million (USD 520 million).

In 2007 summer, Switzerland returned CHF 34.1 million to (USD 34 million) the government of Taiwan with the approval of the two Taiwanese account holders who were facing trial in the case.

With Taiwanese court proceedings pending, Swiss authorities have been unable to determine whether the rest of the money blocked in Switzerland is from criminal activities, Perraudin said.

A major part of the money belongs to the family of fugitive arms dealer Wang Chuan-pu, who fled Taiwan in 1993 after the frigate deal turned into a scandal.

Wang was a local agent for Thomson-CSF, the French firm which sold the six Lafayette frigates. He fled Taiwan following the death of a navy captain who was widely believed to have been killed because he was about to blow the whistle on colleagues for allegedly taking kickbacks in the Lafayette deal.

Taiwan has charged Wang with murder, corruption, money laundering and fraud. A Taiwan court issued a warrant for Wang’s arrest but he went into exile first in the United States and later in Europe.

The investigations began when Taiwanese authorities concluded that the price of the frigate sale was excessive.

[AP / Expatica]