June 5, 1990, Monzer Al Kassar and his wife opened an account, number 1964, at the Audi Bank in Switzerland. Al Kassar and his wife used their real names and both signed the documents, highly unusual for a bank account that would later be used in an illegal arms deal. The initial purpose of the account is unknown. The bank records from this account and others would later become evidence used by a Swiss prosecutor to freeze Al Kassar's proceeds from the illegal sale of Polish arms to Croatia and Bosnia. Subsequent events provided the necessary ingredients for an embargo-breaking arms deal: a war, an attempt by the international community to stop it, and a broker able to work around it. Croatia and Slovenia declared themselves independent from Yugoslavia in June 1991. A bloody civil war ensued. The United Nations Security Council voted on September 25, 1991, to impose an arms embargo on Yugoslavia, whose constituent republics were not yet recognized by the international community as independent countries. Bosnia declared its independence in March 1992, which was followed by an even more bloody and complicated civil war. Like many other states, the Swiss Federal Council adopted the arms ban -- U.N. Security Council Resolution number 713 -- on December 18, 1991, making the embargo Swiss law (RS 514.545). This later formed the basis for Swiss legal proceedings against Al Kassar. U.N. embargoes mean nothing unless they are adopted by the legislatures of individual U.N. member states and enforced by their respective legal systems.
Shortly thereafter, a Croatian couple, Snejana and Zeljko Mikulic, holders of an account at Die Erste Bank in Vienna, ordered $2,649,000 in bank transfers to the account of Bassam Abu Sharif, one of Yasser Arafat's closest advisors, at Arab Bank in Geneva. A Die Erste Bank document states that the transfers were for a shipment of sugar, powdered milk and tea to Croatia. A few days later, Sharif began a series of transfers, ultimately totaling $2.3 million, to account number 1964 at Audi Bank, the account belonging to Monzer Al Kassar. In turn, Al Kassar transferred $2,549,135 to the Luxembourg bank account of Cenrex, the Polish state arms company. On March 10, 1992, a Honduras-registered ship, the Nadia, docked at Ceuta, Spain (a Spanish territory in Morocco) for supplies. When port officials examined the cargo documents, they found the papers in order. The 27 containers of arms and ammunition were being sent by Cenrex in Poland to the defense ministry of Yemen. After the ship was allowed to proceed, it headed not to Yemen but to Rijeka, Croatia, where it unloaded. In 1992, Spain arrested Al Kassar on charges of piracy and providing the arms to the Abu Abbas-led PLF terrorists who hijacked the Achille Lauro cruise ship and murdered American Leon Klinghoffer. Western intelligence agencies concluded that Al Kassar flew Abbas to safety aboard one of his private planes after the hijackers surrendered. One prosecution witness, Ahmed Al Assadi, while spending time in Vercelli prison for participating in the hijacking, changed his story and refused to go to Spain to identify Al Kassar as the person who supplied the hijackers' weapons. After Al Kassar's arrest, another accuser, Ismail Jalid, fell to his death from a fifth-story window in Marbella, Spain, in what the coroner called "an alcoholic coma." During the 1995 trial, in a highly publicized standoff with police, a third witness's children were kidnapped by Colombian drug traffickers shortly before he testified. The witness blamed Al Kassar, who denied involvement and stated, "I have nothing to do with the kidnapping and I hope that it is over as soon as possible. Children are sacred for Arabs. No one, not even your worst enemy, deserves this." Al Kassar was later acquitted of all charges. While building the case, Spain requested that Switzerland seize Al Kassar's bank accounts. Swiss officials then opened their own preliminary inquiry into money laundering, lack of vigilance in financial operations, and fraudulent documents and foreign certificates. Following this inquiry, Swiss authorities began to investigate Al Kassar's arms sales using Swiss banks.Questioned on December 9, 1993, by Swiss prosecutors, Al Kassar explained that he was a diplomatic representative of Yemen in Poland and therefore could not answer questions about government-to-government affairs. A search of Al Kassar's Spanish address revealed documents confirming his relationship to the Croatian Zeljko Mikulic and containing the codes used for the ship's contents: "Tea" meant TT pistols (Tula-Tokarev pistols, developed in the U.S.S.R. in the 1930s and subsequently manufactured by other Eastern Bloc countries), and "tea bags" meant bullets. Bassam Abu Sharif was questioned by Swiss officials while passing through Geneva in 1994. He claimed that he had only met Al Kassar once in 1979 and twice thereafter. He explained that he had been asked by the Yemeni government to use his bank account to transfer money for an arms sale organized by the Yemeni ministry of defense to buy arms for Bosnia and Croatia. He said that he learned only later that Al Kassar had organized the sale.
A Determined Swiss Prosecutor Freezes Al Kassar's Millions
Geneva Cantonal prosecutor Laurent Kasper-Answermet upheld his 1992 freeze on $6 million belonging to Al Kassar, arguing that his financial investigation found the funds to have come from criminal activities. The financial side of an arms deal leaves a paper trail, whereas arms hidden in shipping containers, guerilla armies and corrupt government officials leave none. In 1998, a Geneva appeals court upheld the seizure but released $3.7 million not directly linked to the arms deal.
"If Yemen does a deal with Bosnia and Croatia, how can I control it?" asked Al Kassar, dismissing accusations that he is an embargo-busting arms dealer. Under existing legal controls, his question is reasonable. The case is the first of its kind in Switzerland and is expected to set a precedent. The arms did not touch Swiss territory and did not involve Swiss citizens or the country in any way other than through its banking system. Switzerland is not directly affected by the small-arms trade but has an interest in maintaining the respectability of its banking system. Such cases, as well as that of Leonid Minin ,an Israeli citizen arrested in Italy for selling Ukrainian weapons to Liberia and Sierra Leone, are pushing existing legislation in new directions in an attempt to discourage the illegal arms trade. Al Kassar has lost successive court appeals and has one final chance to have his $2.3 million returned in an appeal to a Swiss federal court.
