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).
1. The Parliamentary Assembly reaffirms
its unwavering commitment to combating impunity for perpetrators
of serious human rights violations and corruption, which pose 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 way stations 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, the Netherlands, Switzerland and 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 bank 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 Kingdom, the United States 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 France and the United
States determined that the US$230 million fraud and subsequent laundering
were conducted by a criminal organisation involving Russian Government
officials.
11. The Assembly observes that, according to the 2021 “Report
on the national assessment of the risks of money laundering and
terrorist financing in Switzerland”, 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 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 swissinfo.ch on 18
April 2026, Denis Katsyv transferred approximately 6 million Swiss
francs 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, 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
that 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 European Union Global
Human Rights Sanctions Regime (the “European Union Magnitsky Act”)
to individuals involved in the ill-treatment and death of Sergei
Magnitsky;
19.2 expand the European Union 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.
