trending Market Intelligence /marketintelligence/en/news-insights/trending/dygtvgsqwzrakmhmzn4lmq2 content esgSubNav
In This List

Switzerland freezes bank accounts linked to former Mongolian minister


Banking Essentials Newsletter: 7th February Edition

Case Study

A Bank Outsources Data Gathering to Meet Basel III Regulations


Private Markets 360° | Episode 8: Powering the Global Private Markets (with Adam Kansler of S&P Global Market Intelligence)


Infographic: The Big Picture 2024 – Energy Transition Outlook

Switzerland freezes bank accounts linked to former Mongolian minister

Switzerland's Swiss Federal Tribunal upheld a decision to seize US$1.9 million in Swiss bank accounts as part of an ongoing corruption probe tied to former Mongolian Finance Minister Bayartsogt Sangajav, Reuters reported March 19.

The seized accounts were allegedly used to transfer about US$10 million to the former minister, who was instrumental in clearing the way for Rio Tinto's Oyu Tolgoi copper-gold operation in Mongolia.

Rio Tinto holds an interest in Oyu Tolgoi through its 50.8% stake in Turquoise Hill Resources Ltd., which owns 66% of Oyu Tolgoi.

The Swiss Office of the Attorney General, or OAG, confirmed the ongoing criminal investigation in an emailed statement to Reuters. The court documents refer to the mining property and do not mention Rio Tinto or Bayartsogt by name, but details clearly indicate that both form part of the OAG's investigation.

The OAG launched its investigation in 2016, when prosecutors seized bank accounts they believed were linked to a transfer of €8.2 million, or US$10.1 million, to accounts controlled by Bayartsogt in September 2008, when he took office as finance minister.

The unidentified account holder sought to unfreeze the accounts, contending that there was insufficient suspicion to make a case, that Switzerland lacks jurisdiction and that the statute of limitations had expired and cited diplomatic immunity from criminal prosecution, according to court documents.

"It is very suspicious that the minister of a foreign country, immediately after taking a ministerial post, would be the recipient of such a large sum," the ruling said.

Mongolian anti-graft authorities are also looking into the country's 2009 investment agreement with Rio Tinto, which Bayartsogt signed.

Bayartsogt resigned as deputy speaker of the Mongolian parliament in 2013 after reports by the International Consortium of Investigative Journalists detailed his Swiss bank account.

In late January, the U.K.'s Serious Fraud Office was said to be looking into allegations against Rio Tinto over its failure to disclose information about the Oyu Tolgoi mine.

Turquoise Hill's 66%-owned Oyu Tolgoi LLC recently filed a notice of dispute after the Mongolian Tax Authority delivered a US$155 million tax assessment concerning an audit on taxes levied and paid between 2013 and 2015.