Swiss envoy accused of money laundering

Luxembourg alerted Bern earlier this year

The Swiss ambassador to Luxembourg has been arrested on suspicion of money laundering.

Peter Friederich, aged 60, was detained in the Swiss capital, Bern, on Monday, after an investigation which began with a tip-off from Luxembourg in February.

Friederich is the second envoy to be hit by scandal in as many months

A spokesman for the federal prosecutor's office said the arrest followed "private transactions worth several hundred thousand francs", and that the money was of "unknown origin".

He told Swiss Radio International that authorities were eager to uncover the source of the money.

News of the arrest comes some two months after the Swiss ambassador to Germany, Thomas Borer, resigned following newspaper reports alleging he was having an extra-marital affair.

Under Swiss law, Mr Friederich faces a maximum five-year prison sentence or a fine of one million francs ($670,000).

Bank alert

After the tip-off from Luxembourg, Swiss prosecutors opened an initial investigation in April into persons unknown.

After further information from the Luxembourg authorities, the investigation was extended to the ambassador on 3 July.

The Prosecutor's Office said it opened its investigation against Mr Friederich based on a 1998 money laundering law, which introduced "know-your-customer rules" obliging bankers, brokers and lawyers to report transactions involving the proceeds of criminal activity.

The information from Luxembourg was based on an investigation by anti-money laundering authorities, which had been alerted by a bank in the country.

Career diplomat

A spokesman added that there was no evidence that the ambassador had abused his office.

A career diplomat, Mr Friederich was ambassador in Vietnam and Cuba before taking up his post in Luxembourg in 1999.

He has also been in charge of promoting co-operation between western and eastern European states for the Foreign Affairs Ministry.

He comes from Rapperswil in the canton of Bern and has been a diplomat since 1971.