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. Last Updated: 07/27/2016

Swiss Court Ties Conditions to Extradition

Switzerland's highest court has ruled that a former executive at a state-owned company can not be handed over for trial in Russia without a guarantee that conditions for his detention will meet standards set by the European Convention on Human Rights.

The defendant, who was not named in the ruling after requesting anonymity, has called the fraud charges filed in the Russian courts politically motivated.

The ruling, which was published last week, requires Russia to commit to convention stipulations governing the physical conditions of detainment, visitation rights and access to outside legal and political council.

But the defendant's lawyer and rights activists said that, while unprecedented, the guarantees are insufficient and that the case is likely to end up in the European Court of Human Rights.

Although the documents from the Swiss Federal Court in Lausanne do not name the defendant, the information in the 11,000-word judgment points overwhelmingly to Yury Privalov, a former managing director of a London-based Sovkomflot subsidiary, Fiona Maritime Agencies.

The lawyer, Stefan Wehrenberg, who was named in the documents, would neither confirm nor deny by telephone from Zurich that Privalov was his client, citing the request for anonymity.

Wehrenberg did say the ruling was unprecedented.

"The court has called for far-reaching guarantees hitherto unheard of," he said.

He added, however, that recent cases have demonstrated that even if it did provide such guarantees, Russia was unlikely to follow through on its commitments. As a result, Wehrenberg said, he would have to take the matter to the European Court of Human Rights in Strasbourg.

"The guarantees are not enough," he said. "The proper ruling would have been to refuse my defendant's extradition [outright]."

Wehrenberg said Swiss legal authorities were in the process of trying to get the guarantees stipulated in the ruling from the Russian side through diplomatic channels.

"This might be pretty complicated," he said, adding that there was no hurry, as the Federal Court set no deadline for the receipt of the guarantees.

No one at the Swiss Embassy was available for comment Thursday.

The judgment, posted on the court's web site, states that prison conditions in Russia have to comply with the Convention, including access to medication. Swiss Embassy officials, his lawyer and his family must also have unrestricted to the defendant, who is a Russian citizen, and the Swiss authorities must be informed regularly of his whereabouts.

Human rights experts question the value of such assurances. Firederike Behr from Amnesty International's Moscow office pointed to the case of Ahmed Agiza and Mohamed al-Zari, who claimed to have been tortured in Egypt after they were handed over by Sweden in 2001 under guarantees from Cairo that they would receive a fair trial.

"Such assurances might not be worth the paper they are written on," Behr said in e-mailed comments.

She also said Switzerland in 2006 extradited a political activist to Libya after receiving similar guarantees.

"Less than two months later he was imprisoned again for setting up a peaceful demonstration," she said.

While the Lausanne court did take the defendant's concern over prison conditions seriously, it dismissed his claim that the prosecution's case against him is politically motivated, likening his case to the campaign against Yukos.

"There is no indication that the Russian authorities are trying to weaken a political opponent," the ruling stated.

Sovkomflot is suing the defendant over what it charges was his role in an ocean freight fraud scheme. The company's deputy head, Vladimir Mednikov, said Thursday that the cost to the company was some $600 million.

"We are suing the culprits and we are going to win," Mednikov said in a telephone interview.

The case against the defendant in Zurich is part of a larger campaign that has seen civil cases filed by 76 claimants in British civil courts against 29 defendants, including former Sovkomflot CEO Dmitry Skarga, whom it accuses of setting up the fraud scheme.

"The case is so big that some of the courtrooms were too small for all the parties' lawyers," Mednikov said.

He confirmed that Privalov was among the defendants but said he could not comment on any criminal investigation against former employees. It was not clear Wednesday if any other defendants were facing criminal charges.

A spokeswoman for the Prosecutor General in Moscow said Wednesday that she had no immediate information on the case and asked for questions to be submitted in writing.

The civil case has reached the English High Court, the Court of Appeals and even the House of Lords, which in October upheld a decision in favor of the defendants, who wanted to pursue arbitration procedures.

The defendants are accused of leasing out Sovkomflot's ships below market rates to companies registered in the British Virgin Islands.

As head of the shipping agency's London office, Privalov was responsible for buying and selling freighters for the fleet, which at the time comprised 47 vessels.

According to the plaintiffs, these firms then leased the ships out at higher rates. The difference, along with client search fees, remained with the offshore companies, the claimants charge.

According to the fact sheet for the Swiss case, which is has been confirmed by public proceedings in the English courts, the Virgin Islands firms were set up and owned by businessman Yury Nikitin. Sovkomflot accuses Nikitin of bribing its own officials, including former CEO Skarga, into engineering the scam.

According to a litigation fact sheet obtained from Sovkomflot's London office, the High Court in May 2007 granted an order to freeze $337 million of Nikitin's assets and $112 million owned by Skarga.

A trial date in London has been set for no earlier than October 2009.

The court in Lausanne cited claims by Russian prosecutors that the defendant had laundered at least $200 million in fraudulent profits through Swiss bank accounts.

Privalov was arrested in Switzerland in December 2006 on a warrant issued by Moscow's Basmanny District Court. Russia sent an extradition request to Swiss authorities early in 2007, which led to a string of court decisions culminating in last week's ruling.

Under Skarga's leadership, Sovkomflot temporarily became an issue for financial market players because it had made plans for an initial public offering on the New York Stock Exchange. National media reported at the time that the management had cited poor profit figures, partly the result of the fraud scheme, as part of its argument to the government for privatization.

Since Skarga's dismissal, the IPO plans have faded. By contrast, President Vladimir Putin last summer decreed that Sovkomflot merge with the country's other big shipping corporation, Novoship, in line with his policy of creating national industrial champions.

Mednikov, the deputy general director, said the IPO plans had not been canceled, but that the priority now was to manage successfully the merger of both companies.

According to its web site, Sovkomflot currently operates 59 vessels.

Staff Writer Natalya Krainova contributed to this report.