Tracking the proceeds of the crime denounced by Sergei Magnitsky and holding its perpetrators accountable
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly
debate on 22 April 2026 (15th sitting) (see Doc. 16362,
report of the Committee on Legal Affairs and Human Rights, rapporteur:
Ms Lesia Vasylenko). Text adopted by
the Assembly on 22 April 2026 (15th sitting).Provisional
version subject to editorial review.
1. The Parliamentary
Assembly reaffirms its unwavering commitment to combating impunity
for perpetrators of serious human rights violations and to combating
corruption, which poses a threat to the rule of law. It reiterates
its call for all those responsible for the death of Sergei Magnitsky,
as well as the beneficiaries of the fraud he uncovered, to be held
accountable.
2. Referring to its
Resolution 1966 (2014) “Refusing impunity for the killers of Sergei Magnitsky”,
the Assembly recalls that Sergei Magnitsky, a Russian tax adviser
and auditor, uncovered a massive fraud perpetrated by Russian Government
officials and accomplices involving the embezzlement of approximately US$230 million
through the fraudulent appropriation of tax rebates from the Russian
Treasury. Mr Magnitsky revealed that the scheme was executed through
the illegal seizure of companies belonging to his client, Hermitage
Capital Management, and the subsequent fabrication of official documents.
In retaliation for his revelations, Mr Magnitsky was arrested, subjected
to inhuman and degrading treatment and denied medical care, and
ultimately died in a Moscow prison in 2009. He was posthumously
convicted of tax evasion. The international responsibility of the
Russian Federation for his ill-treatment, death and conviction was
legally established in a judgment of the European Court of Human
Rights in 2019, which found multiple human rights violations in
his case. All criminal cases within the Russian Federation against
the officials involved in Mr Magnitsky’s ill-treatment and death
have been closed, with no one being held to account. Some of them were
publicly commended by senior officials of the Russian Federation,
and others received promotions.
3. Proceeds of the crime exposed by Mr Magnitsky were laundered
through a complex network, potentially involving waystations in
several States, including the Russian Federation, Belgium, Cyprus,
Estonia, France, Latvia, Lithuania, Luxembourg, the Republic of
Moldova, Monaco, the Netherlands, Spain, Switzerland, the United
Kingdom, the United States of America and the United Arab Emirates.
4. The Assembly welcomes that many member and observer States
of the Council of Europe, including Switzerland, opened investigations
into the reported laundering of proceeds originating from the fraud
against the Russian Treasury. It deeply regrets that several other
member and observer States either did not open such investigations
(Austria, Canada, Denmark, Finland, Sweden, and the United Kingdom)
or failed to secure convictions and/or confiscations (Belgium, Cyprus,
Lithuania and the Republic of Moldova). It notes with satisfaction
that in five States these investigations resulted in convictions,
settlements and/or confiscations of the proceeds of the crime (France,
Latvia, Netherlands, Switzerland, the United States of America).
It regrets however that in several States the proceedings have not
led to any conclusions or convictions so far. Referring to its
Resolution 2218 (2018) “Fighting organised crime by facilitating the confiscation
of illegal assets”, the Assembly strongly reiterates its support
for the confiscation of illegal assets as an effective tool in the
fight against organised crime, including by reducing the authorities’
burden of proof as to the criminal origin of unexplained wealth.
5. The Assembly welcomes the fact that on 30 March 2026, the
Paris Correctional Court held the first criminal trial in a Western
jurisdiction against Dmitry Klyuev, the principal organiser of the
US$230 million fraud, for aggravated habitual money laundering,
with a verdict expected on 8 June 2026.
6. In Switzerland, in response to a complaint lodged by Hermitage
Capital Management, the prosecuting authorities found a link between
the funds embezzled from the Russian Treasury and part of the assets
held in Swiss banking accounts. In 2021, they decided to confiscate
a quarter of the funds frozen during the investigation, applying
the so-called “proportional confiscation” method, on the grounds
that the embezzled assets were mixed with assets of lawful or undetermined
origin. These prosecuting authorities further re-examined Hermitage
Capital Management’s status as a private claimant and decided to
revoke it. The decision became final in January 2025 when Hermitage
Capital Management’s appeal was rejected by the Swiss Federal Supreme
Court.
7. The Assembly regrets that the Swiss money laundering investigation,
notwithstanding the prompt seizure of approximately US$18 million
in alleged proceeds of the crime exposed by Mr Magnitsky, has been overshadowed
by serious allegations that Swiss officials involved in the investigation
accepted undue advantages from high-ranking Russian officials and
oligarchs. The Office of the Attorney General of Switzerland opened
criminal proceedings against a member of the Swiss investigative
team, charging him with abuse of authority, breach of official secrecy,
and accepting a bribe. He was ultimately convicted by a court, although
the Office of the Attorney General of Switzerland downgraded the
charge to accepting undue advantages. The authorities determined
that this investigator’s conduct had no impact on the investigation
itself or on its findings.
8. The assets originally seized were located in Swiss accounts
belonging to Dmitry Klyuev, Denis Katsyv and Vladlen Stepanov –
three Russian citizens identified in multiple jurisdictions, including
in the United States of America, as persons directly involved in
the large-scale fraud denounced by Sergei Magnitsky and/or the laundering
of the proceeds of that fraud. Their names appear on the “Magnitsky
sanctions” lists in several Council of Europe member and observer
States.
9. The Assembly takes note that, to date, Switzerland has not
enacted its own “Magnitsky legislation” and that it regards confiscation
predominantly as a criminal measure, which in most cases requires
a court conviction. This contrasts with several other jurisdictions,
including the United States, the United Kingdom and numerous European
Union member States, where confiscation may be ordered through non-conviction-based proceedings.
Swiss law permits non-conviction-based confiscation primarily in
relation to illicit assets of foreign politically exposed persons,
and on the basis of presumptions regarding assets linked to criminal
organisations.
10. Notwithstanding the well-documented nature of the fraud in
the Russian Federation, including a detailed investigation by the
United States Department of Justice implicating Messrs Klyuev, Katsyv,
and Stepanov, the Swiss prosecuting authorities, having regard to
the position of the General Prosecutor’s Office of the Russian Federation,
concluded that it was not possible to consider the money laundering
to be the work of a criminal organisation. This conclusion precluded
the ordering of confiscation of the seized assets through non-conviction-based
proceedings. By contrast, the authorities in the United States and
in France determined that the US$230 million fraud and subsequent
laundering was conducted by a criminal organisation involving Russian
Government officials.
11. The Assembly observes that, according to the 2021 Swiss report
on the national assessment of the risks of money laundering and
terrorist financing published by the Federal Department of Finance,
the main risk to which Switzerland is exposed is that of being used
as a location for the laundering of assets obtained from financial
crimes committed abroad. This risk is explained by the strong international
focus of the Swiss financial centre and, in particular, its dominant
position in cross-border asset management. The Assembly therefore considers
that the utmost caution is required when dealing with attempts by
suspected foreign criminals to misuse the Swiss financial system
in order to launder the proceeds of crimes committed abroad. Due
to the described exposure of Switzerland, the Assembly appreciates
its attachment to the standards of the Financial Action Task Force
(FATF).
12. In this context, the Assembly welcomes the judgment of the
Swiss Federal Supreme Court of 5 December 2025, declaring the so-called
“proportional confiscation” method unlawful. The Assembly notes that
the Swiss Federal Supreme Court described its ruling as a “landmark
judgment”. Under Swiss law, the invalidation of the proportional
method must apply equally to all three account holders, regardless
of the amount involved.
13. The Assembly expresses serious concern that, following the
Swiss Federal Supreme Court’s ruling of 5 December 2025 declaring
the proportional confiscation method unlawful and ordering recalculation,
the Swiss authorities did not refreeze the funds held by Denis Katsyv.
According to banking records reported by SWI on 18 April 2026, Denis
Katsyv transferred approximately CHF 6 million from his UBS accounts
to banks in Armenia and Israel on 12 February 2026.
14. Nevertheless, considering the high-profile nature of the Swiss
investigation, the serious allegations of misconduct against former
Swiss investigators due to their close links with high-ranking Russian
officials, which have been duly examined by the competent Swiss
judicial authorities (including within the framework of recusal requests),
the prominent global status of the Swiss financial centre, and the
decision to release the assets belonging to Russian citizens appearing
on the “Magnitsky sanctions” lists in several Council of Europe member
and observer States, the Assembly regrets that the Swiss authorities
were not able to prove the allegations and confiscate all the seized
assets.
15. The Assembly finds it regrettable that at a time when the
Russian Federation is attempting to assert its dominance in its
illegal war of aggression against Ukraine, including by increasing
attacks against the Ukrainian civilian population, the money originally
seized in Switzerland will return to the disposal of three Russian citizens
with established links to the Russian State apparatus.
16. Referring to its
Resolution
2218 (2018), the Assembly reiterates that the confiscation of illegal
assets is often impeded by an unreasonably heavy burden of proof
placed upon the competent national authorities. Consequently, the
Assembly invites Switzerland and other Council of Europe member
and observer States to:
16.1 review
their legislation and, where applicable, to introduce or expand
the use of non-conviction-based confiscation, in particular by reversing
the burden of proof as to the origin of unexplained wealth, while
establishing appropriate safeguards;
16.2 review the application of the “proportional confiscation”
method, and consider replacing it with more dissuasive alternatives
to punish perpetrators of money laundering.
17. The Assembly urgently calls on the Swiss authorities to:
17.1 refreeze the assets of all three
account holders (Denis Katsyv, Vladlen Stepanov and Dmitry Klyuev)
and recalculate confiscation amounts in accordance with the Federal
Supreme Court’s “arrêt de principe” of 5 December 2025;
17.2 explore all available legal avenues, including mutual
legal assistance, to trace and recover funds that have already left
Switzerland;
17.3 sign and ratify the Council of Europe Convention on Laundering,
Search, Seizure and Confiscation of the Proceeds from Crime and
on the Financing of Terrorism (CETS No. 198) and, once adopted and
opened for signature, its Additional Protocol; and bring Swiss confiscation
law and practice into line with modern asset-recovery standards,
including the effective use of extended confiscation, non-conviction-based
confiscation and confiscation from third parties, as shortcomings
in this area were laid bare in the handling of the proceeds linked
to the Magnitsky case.
18. The Assembly further calls on all member and observer States
who have not yet done so to consider, in line with
Resolution 2252 (2019) “Sergei Magnitsky and beyond – fighting impunity by
targeted sanctions”, enacting legislation or other legal instruments
enabling the executive, under the general supervision of parliament,
to impose targeted sanctions, such as visa bans and asset freezes,
against individuals reasonably believed to be personally responsible
for or benefiting from serious human rights violations for which
they enjoy impunity for political reasons or due to corrupt practices.
19. The Assembly further calls on the European Union to:
19.1 apply its EU Global Human Rights
Sanctions Regime (EU Magnitsky Act) to individuals involved in the
ill-treatment and death of Sergei Magnitsky;
19.2 expand the EU Magnitsky Act to enable the sanctioning
of legal and natural persons, responsible for, or intentionally
participating in, acts of significant corruption, including the
misappropriation of private or public assets for personal gain,
corruption related to expropriation, government contracts or the extraction
of natural resources, bribery, or facilitating or transferring the
proceeds of corruption to foreign States.
20. Finally, the Assembly calls on the FATF and the Committee
of Experts on the Evaluation of Anti-Money Laundering Measures and
the Financing of Terrorism (MONEYVAL) to consider issuing a recommendation requiring
States to introduce the reversal of the burden of proof in relation
to unexplained wealth.
