A bird lands on a Swiss national flag in Zurich, Switzerland. Reuters
A bird lands on a Swiss national flag in Zurich, Switzerland. Reuters

Russia warns against Swiss crackdown on Kremlin spies



Russia cautioned Switzerland on Tuesday that any attempt to impose sanctions for alleged illegal activities on Swiss soil would undermine its position of neutrality.

A blunt intervention from Russia's ambassador to Switzerland Sergei Garmonin comes just days after Switzerland's authorities said they were investigating two suspected Russian spying cases.

Mr Garmonin has been summoned to the Swiss foreign ministry three times already this year over concerns about alleged espionage activities.

On Sunday, the Swiss foreign ministry said it was calling on Russia “to immediately end illegal activities on Swiss soil or against Swiss targets”.

Reacting to the comments, Mr Garmonin said diplomatic relations between the two countries would suffer should Bern decide to punish Moscow.

"Such a step would be contrary to Bern's declared neutrality policy and would cause serious damage to the Russian-Swiss ties," he told Sputnik.

The Swiss government confirmed reports on Friday that it had foiled a Russian plot with the help of Britain and the Netherlands allegedly targeting a laboratory 40 kilometres away from Bern.

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Read more:

Russian spies were arrested in Holland earlier this year

UK and Russia trade barbs at UN over spy attack

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Media reports said that two suspected Russian spies, who were later arrested by Dutch authorities, had selected the laboratory because it was testing the nerve agent used to attack former Russian double agent Sergei Skripal in Britain.

Britain has blamed Russia for the attack, which happened in the English city of Salisbury in March this year, and has charged two Russian nationals in absentia. Moscow denies any involvement.

Mr Garmonin accused Swiss media of using inflammatory rhetoric to try and change the country’s position towards the Kremlin.

“I think that certain well-known circles, who are trying to force Switzerland to change the traditional, independent and neutral approach to the international affairs and take a more confrontational attitude towards Russia, are behind these 'revelations’," he said.

Swiss prosecutors revealed on Saturday that they were also investigating a suspected Russian cyber attack on the offices of the World Anti-Doping Agency (WADA) in March 2017.

The agents suspected of carrying out the WADA attack are the same pair being held in the Netherlands, the attorney general’s office said.

The agency had been investigating reports of doping by Russian athletes and resulted in Russia being banned from competing in the Olympics for three years.

Russia finds out on Thursday whether it will be readmitted to the sporting community at a meeting of WADA chiefs in the Seychelles.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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