Swiss Bank Giant accused of laundering Timber Money

A Truck loaded with tropical timber in the Malaysian state SabahTrucks loaded with illegally logged tropical timber, photographic evidence from Sabah

In the Malaysian state of Sabah, the Chief Minister and his ruling family are systematically lining their pockets with the spoils of tropical deforestation. The money from the illegal trade was laundered through the accounts of UBS, a major Swiss bank. Urge UBS to put an end to its unsavory business relationship with the timber mafia.

Sabah is a state in Malaysian Borneo covered by an extensive network of protected areas. Its tropical forests are home to rare species such as Borneo pygmy elephants, Sumatran rhinos and orangutans. But its natural environment is in jeopardy. Sabah has been governed by Musa Aman since 2003. According to research by the Malaysian Anti-Corruption Commission (MACC), Chief Minister Musa Aman and his family are systematically lining their pockets with the spoils of deforestation in Borneo.

As MACC discovered, Chief Minister Aman collected millions in bribes for allowing logging companies to cut down rainforest plots. As early as 2007, the commission came across 5,000 illegally felled logs from protected areas. Its investigation determined that senior members of the government are involved in the scandal. Musa’s brother is the Malaysian foreign minister, while the attorney general is a close family friend. Although the evidence is overwhelming, no charges have been brought to date and MACC’s work has been obstructed repeatedly. The investigations have also been impeded by the Swiss bank UBS.

According to the Swiss Newspaper „Handelszeitung“, the UBS AG branch office in Singapur accepted cash cheques of 15 million Dollars from a close associate of Musa Aman. “With this transaction, UBS violated internationally recognized standards intended to combat money laundering”, as the Swiss Bruno Manser Fund noted in a statement. “We have therefore prompted the finance police and banking supervisory authorities in Singapore and Switzerland to initiate investigations against the two banks.”

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Please urge the UBS board to cooperate with the authorities and put an end to its unsavory business relationship with the tropical-timber mafia.

Since 2007 the MACC (Malaysian Anti-Corruption Commission) has been investigating Musa Aman on allegations of illegal trade in tropical timber, corruption and money laundering. Documents handed in as evidence to the Zurich Public Prosecutor's Office, proved Micheal Chia of being the central figure in the affair. Chia is a close associate of Musa and his family. The cunning Chia acted as a middle man, giving grants for illegal tropical hardwood logging concessions and paying kickbacks onto the accounts of Musa and his family.

Also strongly suspected of playing a leading role in the affair is Richard Christopher Barnes, a Sabah lawyer, who acted as a "shaker and mover" for Musa Aman. Chia and Barnes were interrogated in 2010 and both made extensive confessions. Because of these confessions, enough proof was secured, that 40 different charges could be held against Musa Aman. However, any effort from the side of the MACC to bring Musa and his family to court were blocked by Attorney General Abdul Gani biin Patail. He is a relative of Musa and a close family friend.

Bruno Manser Fund files a criminal complaint against UBS

Musa Aman´s UBS Swiss bank account plays the key role in the affair. Altogether more than 70 million Euro kickbacks from the illegal trade of tropical timber have supposedly been laundered over this bank account. According to the findings of the Swiss Bruno-Manser-Fonds (BMF) there are more bank accounts involved that exist for the purpose of legalizing money from the tropical timber Mafia. Because of this, the BMF demands the UBS to freeze the bank accounts of further 46 Malaysian politically exposed persons (PEP).

In spring 2011, the Swiss Federal Office of Justice already gave legal assistance to the Hongkong authorities whilst they were investigating against Musa Aman. The documents handed in as evidence to the Zurich Public Prosecutor's Office prove that Michael Chia, managed large cash payments from timber companies with logging interests in Sabah to Musas lawyer (Barnes), his two sons living in Australia and to forestry officials in Sabah. For that reason the BMF filed a criminal complaint against the UBS over the laundering of proceeds of corruption.

Deforestation in biodiverse ecosystems

On the basis of the existing documents and pieces of evidence, proof is given that because of Musa Amans´ illegal logging concessions, 15.000 hectares of primal rainforest has been clear cut. This includes forests in areas of conservation in the National Park. After deforestation Musa gave his approval for the partial cultivation of palm oil plantations on the clear cut areas. The rainforests of Borneo are especially biodiverse and give home to many endemic species. Extensive forest clearance in these sensitive ecosystems causes severe damage to the environment.

The trade with illegally logged timber in Sabah is less an exception and rather a system. In the neighboring state Sarawak the governor Taib Mahmud  has been ruling for nearly 30 years. He is known as being primarily responsible for the rapid logging of the rainforests in Sarawak. Also Taibs ruling family is involved in the global network of corporations and offshore financial centers, that help laundering the kickbacks from illegal tropical timber trade.

Just because it´s legal it´s not environmentally friendly

In the attempt to set boundaries to the tropical timber Mafia, the USA has introduced an interdiction of commerce on illegal wood imports, the EU has set itself this goal for 2013. However, the practical experience will  show whether the prohibition will work or not. The successful implementation depends on many variables. “Currently nothing is known to us about confiscation and investigation in Germany and the EU, although according to the data of EU, Worldbank, Interpol and others, a considerable amount of  timber traded with – millions of tonnes per year – , is the result of illegal logging”, says forest campaigner Klaus Schenck from Rainforest Rescue.

The interdiction of commerce is only the very first step towards saving the forests of our earth. Because making deforestation legal doesn´t mean it is environmentally friendly or without impact on social communities. The best example are huge timber concessions given to the logging industry by governments, e.g., European logging companies in the rainforests of the Congo or the logging in Russia for Ikea.

A Truck loaded with tropical timber in the Malaysian state SabahTrucks loaded with illegally logged tropical timber, photographic evidence from Sabah

Jan 21, 2013

Switzerland: petition presented to UBS

On January 17, 2013, we presented our petition with 48,462 signatures to the Swiss UBS bank, calling on them to freeze the accounts of Musa Aman and refrain from business involving money from the illegal trade in tropical timber

According to findings of the Malaysian Anti-Corruption Commission (MACC) and research by the Bruno Manser Fund, UBS is involved in a dubious business relationship with the governor of the Malaysian state of Sabah. It has been documented that Musa Aman enriched himself and his family in business deals involving illegal timber. The remaining rain forests of Sabah are marked by great biodiversity and are officially protected. Through a network that extends from Malaysia via Singapore all the way to Switzerland, Musa awarded logging permits to shady companies and laundered the profits through middlemen using UBS accounts. In doing so, Musa violates national and international law and endangers the richness of Sabah’s natural environment. While the bank has been alerted to the illegal activities of the Musa clan by authorities and environmental organizations, its relationship to the authoritarian Chief Minister remains unchanged.

UBS is currently under investigation for money laundering by the Swiss public prosecutor. The Swiss bank has not responded to Rainforest Rescue’s request for comments.  

We would like to thank everyone who supported the petition.