Authorities were forced on Wednesday to drop the three-and- a-half-year case against top officials of Al Taqwa Management Organisation because authorities in the Bahamas failed to provide essential bank records before a court deadline passed.
US officials accuse Al Taqwa of sending al-Qaida money through Malta and Switzerland to bank branches in the Bahamas.
"Even when very serious doubts remain concerning both of the suspects, the elements are not sufficient to convince the Federal Criminal Court," said Claude Nicati, deputy Swiss federal prosecutor.
The court ruled a month ago that the prosecutor's office must either bring charges or end its investigation by 31 May.
The Swiss began investigating the company shortly after the 11 September attacks on Washington and New York. But authorities in the Bahamas failed to cooperate, Nicati said.
"The Bahamas never gave a usable response to Swiss requests for judicial assistance."
The prosecutor said he even made two visits to Saudi Arabia to look for bank records because one of the suspects told Swiss investigators that the Al Taqwa books had been transferred to the Saudi capital Riyadh. But Nicati said he was unable to find anything.
The company was based in the southern, Italian-speaking canton (state) of Ticino until it was liquidated in December 2001, soon after the investigation began.
"Even when very serious doubts remain concerning both of the suspects, the elements are not sufficient to convince the Federal Criminal Court"
Deputy Swiss Federal Prosecutor
"Of course, I am happy," said Youssef M Nada, the 74-year-old founder and managing director of the company.
He told Aljazeera that he was suing the Swiss Prosecutor- General and that he should now hand over the documents pertaining to the case and reopen his blocked bank accounts in Switzerland.
Nada's Syrian-born associate Ali Himmat, 66, said he was "very happy" to learn of the decision to close the case.
US terror list
"I always knew that I never did anything wrong," Himmat said. "I was confident that Swiss authorities would find out that I've never done anything wrong."
Nada and Himmat, who both live in Italy near the Swiss border and hold Italian citizenship, founded Al Taqwa in 1988, according to Swiss officials.
A senior member of the Muslim Brotherhood in Cairo has said Al Taqwa was set up to provide banking services in Europe according to Islamic principles, which forbids the paying of interest.
George Bush has led the charge
to squeeze 'terror financing'
The company has been listed by the United States since late 2001 as an organisation accused of helping fund terrorism.
Nada and Himmat are listed individually, as are three Swiss citizens who were on the board: Albert Huber, 77, who took the forename Ahmed on his conversion to Islam; Mohamed Mansour, 76, a retired professor at Switzerland's Federal Institute of Technology; and Mansour's wife, Zeinab Mansour-Fattouh, 72.
After the publication of the list in 2001, police raided the firm's headquarters in Lugano and hauled away vanloads of documents.
They also searched the homes of Nada and Himmat in nearby Italy and the home of Huber near the Swiss capital Bern.
Swiss authorities blocked the accounts of the company and the personal accounts of board members, while neighbouring Liechtenstein froze the accounts of an affiliate firm, the fiduciary company Asat Trust.
But the prosecutor's office never filed charges or made arrests.
"I always knew that I never did anything wrong. I was confident that Swiss authorities would find out that I've never done anything wrong"
Former Al Taqwa Management Organisation official
Company officials have repeatedly denied links to terrorism and accused Swiss authorities of taking part in a US-led anti-Muslim campaign.
Nicati said that although the prosecutor's office removed its block from the bank accounts of the company and its officers, they remain frozen because of United Nations sanctions targeting those on the US list.
"I have no rights," Mansour said from his home near Zurich. "The UN decided something and the American government decided something. No charges were ever brought against me."