November 19, 1996


Mr. Paul A. Volcker, Chairman of the Independent Committee of Eminent Persons, announced today that the Committee had completed its Mandate and Instructions for the investigative audits of dormant accounts, financial instruments, and other assets deposited in Swiss banks by the victims of Nazi persecution.   It has selected three international audit firms to begin immediately on the First Phase of the work.   The firms selected are Arthur Andersen, KPMG Peat Marwick, and Price Waterhouse.

The Committee undertook the responsibility of appointing auditors and overseeing their work in accordance with a Memorandum of Understanding of May 2, 1996 between the World Jewish Restitution Organization, acting with other representative Jewish organizations, and the Swiss Bankers Association.

The Committee completed work on the Mandate for the auditors after taking into account the comments that were made by several international audit firms at meetings in Zurich on September 12 and 13, 1996, and their formal written proposals submitted to the Committee on November 4, 1996.   The full text of the Mandate is attached, together with the Memorandum of Understanding of May 2, 1996, a fact sheet, and a list of current members of the Committee.

The three firms were chosen for their overall experience, expertise in forensic auditing, knowledge of the Swiss banking system, understanding of the work program of the Committee, and ability to commit their personnel and other resources to carrying out the Mandate promptly and effectively.   It is contemplated that individual banks will be audited by firms that are not normally engaged in audit work for the specific bank under review.   All the selected firms have been previously approved by the Swiss banking authorities for work on audits of Swiss banks.   In accordance with Swiss law, individual account names will not be revealed to the Committee.

The Committee was very pleased that it received highly qualified proposals by all of the international audit firms authorized to do bank auditing work in Switzerland.   On behalf of the Committee, Chairman Volcker expressed his deep appreciation to each of the firms for their cooperation with the Committee and their interest in furthering its work.   He noted that, as the audit proceeded, additional firms may be called upon to facilitate and speed the work.

The Mandate instructs the selected audit firms to determine whether there are any previously unreported dormant accounts, financial instruments, and other assets that were deposited in Swiss banks before, during or immediately after the Second World War.   This search for dormant accounts also includes an examination of whether or not accounts that would otherwise have been dormant have been extinguished by actions that, whether or not inadvertent or deliberate, were illegal or in breach of fiduciary duties.   Indications that third party intermediaries abused their responsibilities or evidence of the existence of looted assets revealed during the audits will be brought to the attention of the Committee, which in turn can notify the Swiss Government of this evidence.

In recognition of the complexity of the task assigned to the Committee, and the fact that so many years have past since the events under scrutiny took place, the Mandate sets out a two-phase work program to assure that the audits are carefully prepared and that they will be thorough and complete.   In the First Phase, the auditors will engage in data gathering and analysis to establish the legal and practical framework in which deposits were made in Swiss banks to serve as a basis for subsequent pilot audits.   The audit plan that will be derived from this work will then be tested in pilot audits of a representative sampling of Swiss banks.

Based on this experience, a full scale audit program will be initiated in about six months.   In this audit process, relevant banks will have a complete and thorough audit with full access to their records.   The Committee has been assured of the full cooperation of the Swiss Banking Commission in carrying out this audit.

The Committee expects that the process of full audits may require a year to be completed.   The Committee will closely supervise and coordinate the work of the auditors and will, among other measures, establish a liaison subcommittee.   Status reports will be made from time to time on progress.   Estimates of quantitative or other findings would be premature until detailed audits are completed.

The Committee will cooperate fully with the parallel historical and juridical investigation authorized by legislation underway in the Swiss Parliament.   Mr. Volcker has expressed to the Swiss authorities his appreciation of their intention to provide the Committee with appropriate cooperation and assistance in its work.

The Independent Committee of Eminent Persons
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