Assets freezing: the case of Youssef Nada

After winning a case against the Swiss prosecution in late 2005, and filling a new lawsuit seeking damages from the Swiss government in early June, Youssef Nada, former manager of the Al Taqwa Bank, although currently listed by the UN as an individual associated to Al Qaeda and the Taliban, surprisingly still appears to be bypassing all international sanction mechanisms. He recently decided to sell his residence in Campione d’Italia (Italian enclave in the Swiss territory), once raided by the Italian police in November 2001. The residence, now featured on Christie’s Great Estates website, is on sale for 10,570,000 Swiss Francs (8,505,673 USD) and is described as an “exclusive villa with sweeping views” by its Swiss real estate agent (christies_nada.jpg).

In paragraph 2 (a) of its resolution 1390 (2002), the UN Security Council decided that States shall freeze without delay the funds and other financial assets or economic resources of the individuals whose names appear on the list, as well as the funds and other financial assets or economic resources of: “groups, undertakings and entities, including funds derived from property owned or controlled, directly or indirectly, by them or by persons acting on their behalf or at their direction, and ensure that neither these nor any other funds, financial assets or economic resources are made available, directly or indirectly, for such persons’ benefit, by their nationals or by any persons within their territory”.

The UNSC Resolution 1390 (2002) was adopted under Chapter VII of the Charter of the United Nations, and is therefore binding on all UN member states, but in its second report of November 2003, the UN Monitoring Group noted the “reluctance on the part of States to freeze tangible assets such as business or property.”

The report stated that “while actions have been taken by a number of countries to freeze Nada’s and Nasdreddin’s bank accounts, or accounts held in the name of one or more of their enterprises, nothing has been done with respect to any of their other physical or business assets. This included, inter alia, their residences and/or commercial property in Campione d’Italia, Lugano, and Milan.”

The report further recommended that “each country should also adopt and implement measures, including legislative ones, which would enable the competent authorities to seize and confiscate property that is the proceeds of, or used in, or intended or allocated for use in, the financing of terrorism, terrorist acts or terrorist organisations”.

On its part, the Financial Action Task Force also decided, at its meeting held in Stockholm in October 2003, to set forth in greater detail the obligations to freeze effectively terrorist-related assets, including assets other than bank accounts. It issued a new interpretative note regarding the property to be seized and the procedures to be used. It made it clear that the obligation to freeze funds and other assets, pursuant to various United Nations resolutions, included “those [assets] wholly or jointly owned or controlled, directly or indirectly, by designated persons”.

Despite these legal and doctrinal rules, it seems that several governments still fail to comply with their international obligations, for the sole benefit of the designated individuals.

Posted in Legal Issues, Sanctions, Terrorist Tagged with: , , ,

About JC Brisard

Jean-Charles Brisard

Jean-Charles Brisard is an international consultant, specialized in the financing of terrorist organizations.
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