This week’s digest tracks a sharp rebuke of Switzerland over the Magnitsky case, a high-profile money-laundering arrest in Nepal, fresh OFAC and FinCEN guidance reshaping U.S. sanctions compliance, and a continuing erosion of corporate transparency in Europe — all set against a 2025 Corruption Perceptions Index that confirms a multi-year backslide across democracies and autocracies alike.
1. Council of Europe Rebukes Switzerland Over Magnitsky Funds
The Parliamentary Assembly of the Council of Europe (PACE) this month issued one of its sharpest rebukes in years against Swiss authorities, voting 43 to 7 to demand Bern refreeze and recover assets linked to the $230 million Russian Treasury fraud uncovered by the late tax adviser Sergei Magnitsky. According to OCCRP’s reporting on the resolution, the Assembly singled out Swiss prosecutors for failing to prevent the flight of previously frozen assets tied to three named beneficiaries of the fraud — Dmitry Klyuev, Vladlen Stepanov and Denis Katsyv.
The decisive trigger was an investigation by Swiss public broadcaster SWI swissinfo.ch, cited in the PACE resolution, which found that Katsyv had transferred roughly six million Swiss francs (about $7.65 million) from his Swiss UBS accounts to banks in Armenia and Israel in February 2026, after the Swiss Federal Supreme Court last December struck down the prosecutors’ “proportional confiscation” methodology and ordered the seizure recalculated. According to the SWI investigation, Swiss authorities did not impose a fresh freeze in the interim, and the funds left the jurisdiction.
The case is significant well beyond Switzerland. It underscores how procedural rulings in financial-secrecy hubs can effectively defeat asset-recovery efforts even after more than fifteen years of multinational litigation. PACE’s resolution, building on earlier Council of Europe work, calls on Bern to recalculate the confiscation amounts, refreeze the assets where possible, and report back to the Assembly. Swiss authorities have publicly defended their handling of the matter, but pending cases against the named individuals remain unresolved, and the funds in question are now beyond easy reach of European law enforcement. Records suggest the episode will weigh on Switzerland’s standing in upcoming FATF and Moneyval mutual evaluations.
2. Nepal Arrests Power Broker Deepak Bhatta in $29 Million Laundering Probe
Nepalese police on April 2 arrested Deepak Bhatta, chairman of the Kathmandu-based conglomerate Infinity Holdings, on money-laundering charges, in what local prosecutors describe as the largest financial-crime case ever filed against a private businessman in the country. According to OCCRP’s account, the Kathmandu District Court granted investigators a 10-day remand to question Bhatta, who has long faced scrutiny for allegedly leveraging political and bureaucratic connections to win government contracts under successive administrations.
Court filings cited by the Kathmandu Post indicate the immediate trigger was a 2021 referral from Nepal Rastra Bank, the country’s central bank, flagging a 450 million Nepalese rupee (about $3.02 million) transfer from Jagadamba Steel into Bhatta’s personal account — a transaction that did not appear in the steel firm’s audited financials. Investigators allege Bhatta then funneled the money through Infinity Holdings into Himalayan Reinsurance Co. Ltd., where he is a promoter. The probe has since expanded to encompass an estimated 3.73 to 3.81 billion rupees (roughly $27–29 million) of alleged misuse and diversion across procurement contracts, hydropower licensing and insurance approvals.
OCCRP’s broader analysis frames the arrest as a test case for whether Nepal’s recent anti-corruption push represents a structural shift or a politically managed campaign. Bhatta has denied wrongdoing through counsel, and the case is at the pre-charge investigative stage. For TIJ readers, the case is a lead worth following: filings indicate that several of the alleged contract irregularities involve foreign-sourced equipment imports, raising the possibility of correspondent-banking exposure for U.S. and European institutions and a future intersection with FCPA jurisdiction if foreign suppliers paid commissions tied to the contracts.
3. OFAC Issues “Sham Transactions” Guidance, Joins FinCEN on Stablecoin Rule
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) on March 31 issued new guidance titled “Sham Transactions and Sanctions Evasion,” confirming that its longstanding 50% Rule remains in force but emphasizing that the rule is “a floor, not a ceiling” for corporate diligence. The Jenner & Block analysis of the guidance notes that OFAC is now expressly telling firms to look beyond legal formalities to “the underlying practical and economic realities” of ownership and control — a posture that materially raises diligence expectations on counterparties using nominee shareholders, layered SPVs, or trust structures common in oligarch holdings.
On April 8, OFAC and the Financial Crimes Enforcement Network (FinCEN) jointly issued a notice of proposed rulemaking under the GENIUS Act, setting out anti-money-laundering and sanctions-compliance obligations for permitted payment-stablecoin issuers. The Sullivan & Cromwell summary reports that the proposal would require issuers to implement Bank Secrecy Act-style AML programs, customer identification, sanctions screening and suspicious activity reporting — closing what compliance specialists have long described as a regulatory gap exploited by sanctioned actors using dollar-pegged stablecoins to move value across borders.
Taken together, the two actions mark a meaningful tightening of the U.S. sanctions perimeter even as other parts of the federal anti-corruption apparatus have been deprioritized. They also extend OFAC enforcement risk further into the digital-asset stack at a moment when on-chain analytics firms are documenting growing use of stablecoins by sanctioned Russian and Iranian counterparties.
4. FATF Adds Kuwait and Papua New Guinea; 22 Jurisdictions on Grey List
The Financial Action Task Force, at its February 2026 plenary, added Kuwait and Papua New Guinea to its list of “Jurisdictions under Increased Monitoring,” commonly referred to as the grey list. According to the FATF announcement, 22 jurisdictions are now under increased monitoring, including Venezuela, Nigeria, the Philippines, Vietnam, Yemen, Kenya, Namibia, Cameroon, South Sudan and the Democratic Republic of the Congo.
Grey-listing carries real-world cost. It triggers mandatory enhanced due diligence on cross-border transactions touching the listed jurisdiction, raises correspondent-banking premiums and, in IMF analyses, has been associated with measurable declines in capital inflows. Kuwait’s listing is particularly notable: it is the first Gulf Cooperation Council member added since the United Arab Emirates was placed on the list in 2022 and removed in 2024. Filings indicate the Kuwaiti deficiencies center on beneficial-ownership verification, supervision of designated non-financial businesses and sanctions implementation.
The next FATF plenary, scheduled for June 2026, is expected to revisit several long-standing grey-list members, including South Africa and Nigeria, both of which have submitted action-plan progress reports. Pakistan and Türkiye, removed in earlier cycles, will face continued post-removal monitoring.
5. CPI 2025 Confirms a Multi-Year Slide in Public-Sector Integrity
Transparency International’s 2025 Corruption Perceptions Index, released in February 2026, ranked 182 countries and territories and reported a global average score of 42 out of 100 — a continuation of a multi-year decline. According to the organization’s findings note, 122 countries scored below 50, and only five — Denmark (89), Finland (88), Singapore (84), New Zealand (81) and Norway — scored above 80, down from 12 a decade ago.
The data show a worrying drift among democracies that previously anchored the upper tier. The United States scored 64, Canada 75, the United Kingdom 70, France 66 and Sweden 80 — each lower than at the start of the decade. Transparency International attributes the slippage to weakened oversight institutions, politicized enforcement, lobbying-driven legislative capture, and, in several cases, the dilution of corporate-transparency rules. South Sudan (9), Somalia (9) and Venezuela (10) again anchor the bottom of the index.
For investigative journalists and prosecutors, the CPI is not itself evidence of corruption — it captures expert and businessperson perceptions — but it tracks closely with independent indicators of rule of law and is a leading variable in cross-border due-diligence models. The 2025 figures suggest the operating environment for kleptocrats has improved at the margins in several Western jurisdictions even as enforcement bodies in those same jurisdictions tout new strategies.
6. Europe’s Quiet Retreat From Beneficial-Ownership Transparency
OCCRP’s recent feature on European corporate-transparency regimes documents how, more than three years after the European Court of Justice struck down universal public access to beneficial-ownership registers in November 2022, member states are still failing to deliver workable “legitimate interest” access for journalists and civil-society researchers. The court found that unrestricted public access violated Articles 7 and 8 of the EU Charter of Fundamental Rights, but explicitly preserved access for parties able to demonstrate a legitimate interest.
Transparency International road-tested the regime in 14 EU countries; its implementation review reports that requests routinely sat unanswered for weeks, that paperwork, fees and language barriers blocked many filings, and that some member states refused journalists’ requests outright on narrow legalistic grounds. The 6th Anti-Money Laundering Directive (AMLD6) sets a July 2026 transposition deadline for harmonized legitimate-interest access, including to historical ownership data — a deadline that will fall in the middle of the next FATF assessment cycle for several member states.
The practical effect is a corporate-secrecy uplift across the bloc precisely as enforcement bodies say beneficial-ownership transparency is the single most important tool against shell-company laundering. Records suggest the gap is being exploited: OCCRP’s reporting notes that several recent cross-border investigations have stalled where ownership chains lead into EU jurisdictions that no longer answer journalist queries.
7. FinCEN Narrows U.S. Beneficial-Ownership Reporting
FinCEN’s interim final rule, in force since March 2025, removed Corporate Transparency Act beneficial-ownership reporting obligations for U.S.-formed entities and U.S. persons, redefining “reporting company” to cover only foreign-formed entities registered to do business in a U.S. state or tribal jurisdiction. The agency confirmed it will not enforce penalties against domestic companies that previously fell within the law’s scope.
The change reduces compliance cost for tens of millions of small U.S. businesses, and its proponents argue it reasserts a constitutional limit on federal corporate registration mandates. At the same time, anti-money-laundering specialists warn that the carve-out narrows the database U.S. and foreign law enforcement had expected to draw on to map shell-company networks. Pending litigation challenging the original rule is ongoing in multiple federal circuits, and Congress has begun hearings on whether to codify the narrower regime or restore broader coverage. The current posture leaves foreign-formed entities — historically the structures of greatest concern in kleptocracy cases — within scope, but excludes the U.S.-state LLCs that the FinCEN advisory on kleptocracy itself identified as a recurring laundering vehicle.
8. International Anti-Corruption Prosecutorial Taskforce Stands Up
The United Kingdom’s Serious Fraud Office, the Swiss Office of the Attorney General and France’s Parquet National Financier in late March announced an International Anti-Corruption Prosecutorial Taskforce, designed to share intelligence and coordinate investigative strategy across jurisdictions. According to DLA Piper’s analysis, the taskforce represents the first formal multilateral prosecution-coordination body since the U.S. Department of Justice scaled back its Kleptocracy Asset Recovery Initiative and KleptoCapture Task Force earlier this year.
The DOJ in February 2026 secured a notable FCPA conviction in the Western District of Pennsylvania, where a federal jury found former coal-company executive Charles Hunter Hobson guilty of FCPA conspiracy, money laundering and wire-fraud conspiracy in connection with a foreign bribery scheme. Sentencing is scheduled for June 25. Arnold & Porter’s commentary notes the case as confirmation that, despite a public reset in DOJ corporate-enforcement posture, individual FCPA prosecutions continue. The taskforce’s emergence suggests European prosecutors are moving to fill space that U.S. enforcement may, at the corporate level, be vacating — a structural shift TIJ will continue to monitor.
Leads Worth Following
Three threads warrant deeper TIJ investigation in coming weeks. First, the chain by which $7.65 million in Magnitsky-linked funds left Switzerland for accounts in Armenia and Israel raises questions about correspondent-banking due diligence at the receiving institutions and about Swiss prosecutorial discretion that PACE itself has flagged. Second, the Bhatta case in Nepal involves procurement contracts whose foreign-supplier counterparties are not yet public; identifying them could open FCPA or UK Bribery Act exposure. Third, the FinCEN domestic carve-out coupled with the EU’s stalled “legitimate interest” rollout is creating a transatlantic ownership-opacity zone that records suggest is already being exploited; cross-referencing recent OCCRP shell-company datasets against U.S. state filings is a productive starting point.
Allegations described in this digest are drawn from court filings, regulatory notices and reporting by OCCRP, ICIJ partners and reputable national outlets. Pending cases remain pending; named individuals and entities are entitled to a presumption of innocence and a right of reply.
Sources
- OCCRP — European Body Rebukes Switzerland Over Magnitsky Fraud Funds
- SWI swissinfo.ch — Millions Linked to Magnitsky Case Leave Switzerland
- OCCRP — Nepal Arrests Alleged Power Broker Deepak Bhatta
- OCCRP — Nepal’s Anti-Corruption Crackdown: New Era or False Dawn?
- FATF — Jurisdictions under Increased Monitoring, February 2026
- Transparency International — Corruption Perceptions Index 2025
- Transparency International — CPI 2025 Findings and Insights
- OCCRP — How Europe’s Retreat From Corporate Transparency Is Shielding the Corrupt
- Transparency International — Beneficial-Ownership Access After the CJEU Ruling
- FinCEN — Interim Final Rule on Beneficial-Ownership Reporting
- Jenner & Block — OFAC Sham Transactions Guidance
- Sullivan & Cromwell — GENIUS Act Stablecoin AML Rule
- DLA Piper — FCPA Year in Review and 2026 Outlook
- Arnold & Porter — FCPA Conviction in U.S. v. Hobson