Swiss Gov’t Forfeiture of Marcos Accounts and Escrowed to PNB -1997

In December 1990, the Swiss Federal Supreme Court confirmed the decisions of lower courts to freeze assets in bank accounts held in the name of the Maler Foundation, the Avertina Foundation, the Palmy Foundation, the Vibur Foundation and the Aguamina Corporation – all found to be dummy corporations of the Marcoses. These assets were frozen and were to be repatriated to the Philippines when a competent Philippine court, i.e., the Sandiganbayan, has rendered a final and binding decision on the restitution of the funds or their confiscation.

On 29 March 1995, the Swiss Parliament passed a law amending a previous act that removed the need for a final judgment of criminal conviction in the case of criminally acquired assets paving the way for the Swiss landmark decision of  10 December 1997 ruling that the Marcos Swiss deposits which were criminally acquired could be returned to the Philippines while awaiting final judgment on the ownership of these deposits.

The Swiss court also announced that the interest and reputation of Switzerland was at stake if it would become a haven for money launderers laundering money obtained by crime. Therefore, in the case of the Marcos deposits, because “the illegal source of the assets in this case cannot be doubted” the Swiss court ordered that the money be returned to the Philippines to be held in escrow account in the PNB to await the judgment of the Sandiganbayan in the forfeiture case.

Thereafter, and upon petition of the PCGG, Swiss Accounts amounting to USD 684 million were transferred as a transitional relief via Escrow Agreements appointing the Philippine National Bank (PNB) as escrow agent while the cases against Marcos were pending before the Sandiganbayan (special Philippine judicial courts with jurisdiction over government officials’ criminal acts of graft and corruption).

The Escrow Agreements empowered PNB to invest the Swiss deposits in the money market or in securities, provided the relevant debtor or company had a Standard & Poor’s rating of at least “AA.” PNB then deposited them in overseas banks including the WestLandesBank in Singapore, that gave rise to another litigation to determine ownership of the funds as the class suit claimants hunt down properties with which to satisfy the Hawaii judgment.

On 15 July 2003, the Philippine Supreme Court reversed a Sandiganbayan ruling allowing the Marcoses an opportunity to be heard on the ownership of said assets. The Supreme Court found said amounts constituted ill-gotten wealth and declared its forfeiture in favor of the Philippine government.

The Swiss government expressed satisfaction over the said ruling and the funds in the escrow account of PNB since 1998 were allowed be transferred to Philippine government coffers. In February 2004, the PCGG remitted the funds held in escrow to the Philippine coffers.

Despite the availability of funds to satisfy the judgement of the Hawaii district court, however, the Philippine government has made no move to compensate the human rights victims. Instead, the government has made every effort to block the claimants from enforcing the Hawaii District Court award.

The PNB petitioned the US Ninth Circuit Court of Appeals for a writ of mandamus to prevent the Hawaii district court from pursuing contempt and discovery procedures against it because of the PNB’s transfer of the funds to Philippine coffers pursuant to the Supreme Court ruling in 2003. It will be recalled that the Hawaii district court issued what, in effect, was a global freeze order to prevent transfer of assets found in the Swiss accounts.

In 2005, the US Ninth Circuit Court granted the writ of mandamus ruling that the Hawaii district court violated the act of state doctrine.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s