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Stashed funds


Parliament backs tougher law on dictators’ assets


The Swiss parliament has agreed on a new law that aims to speed restitution of illicit funds stashed in the alpine country. Officials hope the change will demonstrate that Switzerland is no longer the banker of choice for foreign despots. 

On Monday, the House of Representatives followed the Senate in approving the new law on the freezing and restitution of illicitly acquired assets of foreign politically exposed persons (PEPs). 

The law is designed to be applied in cases where leading political figures enrich themselves through corruption or other criminal means and deposit these illicitly acquired assets in Switzerland’s financial centre. 

From now on, the government will no longer have to resort to an emergency law which was used last year to freeze CHF170 million ($165 million) in assets of Ukraine’s deposed president Victor Yanukovych and members of his entourage. 

The government can now order the freezing of illicit funds within the framework of an administrative procedure when a dictator falls from power. But the state in question still needs to be recognised as corrupt and for Swiss interests to be at risk. 

An earlier condemnation of the dictator is no longer necessary. It will be possible to freeze funds belonging to dictators in power, even if a change of government does not take place. 

Administrative procedures can be initiated with Swiss courts to confiscate assets already blocked in Swiss banks. The aim is to avoid having to give money back to a despot due to an error in the legal procedure. 

Lengthy list

Over the past 25 years, Switzerland has returned $1.8 billion in stolen or embezzled funds seized in accounts held by dictators in Swiss banks. 

The list has mushroomed since the Marcos (Philippines) affair in 1986. Other cases involve Mobutu (former Zaire), Abacha (Nigeria), Salinas (Mexico), Duvalier (Haiti), Gbagbo (Ivory Coast), Ben Ali (Tunisia), Gaddafi (Libya) and Mubarak (Egypt). 

Recently the Swiss authorities have been cooperating with a number of states such as Haiti, Egypt, Tunisia and Ukraine to return stolen assets that have been frozen following changes in power. In particular, they are working to return $40 million to Tunisia, part of the $60 million stashed during the era of former leader Zine al-Abidine Ben Ali.

But Switzerland is still not immune to becoming embroiled in international corruption scandals. In September the office of the Federal Attorney General revealed it had frozen tens of millions of francs in connection with a corruption scandal surrounding 1MDB, a sovereign Malaysian fund controlled by Malaysian Prime Minister Najib Razak.

swissinfo.ch with agencies

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