Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Trafigura lost a last-minute legal gambit on Tuesday to have evidence against it from the star witness in a Swiss corruption trial struck from the case.
The trial against the natural resources trader, in which its former parent company Trafigura Beheer BV and chief operating officer Michael Wainwright are accused of bribery, opened at Switzerland’s federal criminal court in Bellinzona on Monday.
It is the first time a commodity trading company has faced trial for corruption in Switzerland and the first time globally a top executive at one has been directly accused of criminal acts.
A panel of Swiss judges declared that the trial should proceed as planned over the next fortnight, with evidence from the prosecutor’s main witness — a former top Trafigura executive Mariano Marcondes Ferraz — to be heard “on its merits”.
Ferraz, a former trading prodigy at the firm who ran the Angolan subsidiary of Trafigura at the centre of the alleged bribery scheme, is imprisoned in Brazil after being separately convicted of bribing Petrobras executives in 2018.
Prosecutors say TBBV and Wainwright, working with Ferraz, paid more than €5mn to an Angolan official between 2009 and 2011 to secure hugely lucrative oil shipment rights in the country.
Over several hours of dense procedural argument on Monday, lawyers for Trafigura had argued that Ferraz’s testimony was inadmissible because of what they described as a secret plea bargain.
Presenting emails between Brazilian and Swiss authorities, they said they had uncovered a “sophisticated [and] camouflaged” deal cut over how Ferraz’s testimony could be put to use.
Plea bargains are illegal under Swiss law.
Trafigura’s lawyers also argued that swaths of Ferraz’s testimony were unusable because they contained unprovable accusations against the company’s founder and former chief executive Claude Dauphin, who died in 2015.
Citing a ruling by Switzerland’s Court of Appeal handed down last week, they argued the testimony, which accuses Dauphin of being the mastermind of the alleged bribery scheme, could not be used because Dauphin could not contest it.
In the Court of Appeal ruling they referenced, judges threw out a money laundering conviction against Credit Suisse on November 28 because the banker at the centre of that case, in which the bank was accused of laundering Bulgarian cocaine money, died last year, meaning questions crucial to upholding the conviction could no longer be answered.
“Claude Dauphin’s death cannot constitute an impediment to proceeding,” said the presiding judge in the Trafigura trial, rejecting that line of argument and pointing out differences with the Credit Suisse case.
The evidence to support the notion of an illegal plea bargain having been struck was also too scant, he said.
“The assessment of the credibility of Ferraz’s statements will be made on their merits,” he declared.
He and fellow judges nevertheless accepted arguments from Trafigura that there was a valid case to be heard for time-barring certain accusations from the case.
Under Swiss law, serious bribery accusations are time-barred after 15 years have elapsed.
The prosecutor’s case against Trafigura centres on about €5mn of payments made to Paulo Gouveia Junior, a former executive of the Angolan national oil company, between April 2009 and October 2011.
The payments are alleged to have helped secure hugely lucrative oil shipment rights for Trafigura.
Prosecutors argue a “unity of action” means payments over the entire period should be considered. The judges indicated the matter was not settled and would have to be addressed in any final ruling.
