Spanish Court Targets Chilean Bank Tied to Pinochet

MADRID — Almost 15 years after the loss of life of the previous Chilean dictator Gen. Augusto Pinochet, victims of his brutal regime are nonetheless attempting to carry him and his associates accountable. And now the victims look like one step nearer to justice — even when the courtroom is on the opposite facet of the world.

This month, the Supreme Courtroom of Chile was notified by the Nationwide Courtroom of Spain that an investigation had been reopened in Madrid into whether or not a financial institution, Banco de Chile, helped Common Pinochet and his associates launder tens of millions of {dollars} abroad, in accordance with court docket paperwork despatched to the attorneys within the dispute.

The plaintiffs are led by the President Allende Basis and symbolize greater than 20,000 victims of the Pinochet dictatorship. The main target of the authorized effort has been on funds believed to have been expropriated by Common Pinochet and his associates and transferred to private offshore accounts, in what the plaintiffs say had been additionally acts of tax evasion and cash laundering.

Spain was chosen for the authorized case as a result of it has pioneered efforts over the previous three a long time to carry autocrats worldwide accountable for his or her crimes in jurisdictions apart from their very own international locations.

Whereas Common Pinochet died underneath home arrest in Chile in 2006 with out ever standing trial, he was detained in Britain in 1998 on the order of a Spanish decide, Baltasar Garzón, who then didn’t persuade the British authorities to extradite him to Madrid. Britain as a substitute allowed him to return house due to his ailing well being. In 2011, a Chilean fee investigating torture, kidnappings, murders and different human rights violations throughout the normal’s dictatorship recognized over 40,000 victims.

Banco de Chile had for years efficiently argued that Chile slightly than Spain had the jurisdiction to research its Pinochet-related operations. However in Chile, the judiciary closed a money-laundering investigation in 2013 with out charging the overall or anyone else. In accordance with a research commissioned by the Chilean Supreme Courtroom, solely $2 million of the $21 million recognized as Common Pinochet’s private fortune may very well be accounted for as clear cash.

Finally, in 2018, Chile’s Supreme Courtroom ordered the restitution of $1.6 million of Common Pinochet’s property, whereas sentencing three of his former generals for fraud associated to public cash. Banco de Chile was by no means charged in Chile over cash laundering, but it surely paid $3.1 million to the Chilean authorities in 2009 over administrative irregularities referring to Common Pinochet’s cash.

The plaintiffs are hoping to realize in Spain a end result not less than comparable to 1 reached in america, the place Riggs Financial institution agreed in 2005 to pay an virtually $9 million penalty. That allowed the financial institution to keep away from prosecution for failing to report transactions that included cash transferred to Common Pinochet’s financial institution accounts. It adopted a U.S. Senate investigation that additionally established that Banco de Chile was among the many banks that helped Common Pinochet achieve entry to the U.S. banking market.

In its report explaining why it was reopening the case, the Spanish court docket mentioned that Banco de Chile ought to put aside the $103 million to cowl the doable fee that victims of the Pinochet regime are looking for. However the Spanish decide main the case has not but ordered the financial institution to submit this bond. The quantity is predicated on the findings of Spain’s public prosecution in 2009 after it investigated doable cash laundering by Common Pinochet.

Banco de Chile is being represented in Spain by Cuatrecasas, one in all Spain’s largest legislation companies. Neither responded to queries looking for remark.

Juan Garcés, a Spanish lawyer working for the plaintiffs, mentioned that if the financial institution refused to cooperate with the investigation, together with with an anticipated bond order, the following step could be to get Spain’s judiciary to make use of bilateral agreements to drive prosecutors in different international locations to freeze property owned by the financial institution. European Union laws got here into drive final December that was designed to boost judicial cooperation in opposition to tax evasion and cash laundering.

In accordance with its newest submitting with the U.S. Securities and Trade Fee, Banco de Chile final 12 months had deposits in a dozen international locations, together with six within the European Union: France, Denmark, Finland, Germany, Sweden and the Netherlands.

Banco de Chile is majority-owned by Quiñenco, the holding firm of the Luksic household, which ranks among the many wealthiest in Chile. The financial institution’s president, Pablo Granifo Lavín, is a defendant within the case. Banco de Chile closed its subsidiary in New York after getting entangled within the Riggs inquiry.

Spain’s nationwide court docket is reopening the case, which had been suspended for eight years, after concluding that Chile’s judiciary had not investigated totally the wealth expropriation accusations that had been made in opposition to Common Pinochet. “The details should proceed to be investigated,” a panel of three judges from Spain’s nationwide court docket wrote in a choice that rejected Banco de Chile’s enchantment in opposition to reopening the case in Spain. The Chilean Supreme Courtroom was notified of the choice on July 8.

The muse pursuing the lawsuit is known as after Salvador Allende, the left-wing president who died throughout a 1973 navy coup that toppled him from workplace.

The court docket determination is in itself a victory for the plaintiffs in opposition to Banco de Chile, as a result of the financial institution had been “looking for for years to deceive Spanish judges by convincing them that its actions may very well be correctly investigated in Chile as a substitute,” Mr. Garcés mentioned. “Now we have very stable proof that makes us assured that we are able to lastly condemn those that helped the dictator launder his cash.”

Mr. Garcés as soon as labored as an adviser to Mr. Allende. For many years, he has doggedly pursued Common Pinochet and his cash path in numerous courtrooms.

In 2005, the Allende basis filed its first lawsuit in Spain in opposition to Riggs Financial institution, accusing it of serving to Common Pinochet — in addition to his spouse, Lucía Hiriart, and Oscar Aitken Lavanchy, the appointed executor of his property — to switch stolen property to offshore financial institution accounts. The lawsuit was prolonged to incorporate Banco de Chile because the financial institution working for Common Pinochet, however Banco de Chile then launched its personal money-laundering investigation in Chile, convincing the judges that the difficulty was for Chile slightly than Spain to placed on trial.

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