Explainer: What does Switzerland freezing “any assets” owned by Nicolás Maduro really mean?

Illustration: Kai Reusser / SWI swissinfo.ch

Switzerland says it will freeze “any assets” it holds belonging to Nicolás Maduro. What assets does the deposed Venezuelan leader have in Switzerland, if any? And does Switzerland have to follow sanctions imposed by the United States?

On January 5, Switzerland decided to freeze “any assets” held by former Venezuelan leader Nicolás Maduro after the United States captured and charged him with drug trafficking.

Even if Maduro has been sanctioned by third countries, such as the US, Switzerland isn’t legally required to follow them. 2026 Bloomberg Finance Lp

The government said that the steps taken against Maduro and 36 other Venezuelan citizens  were a “precautionary measure” to prevent any existing assets leaving the country. It said the action targeted individuals, including Maduro, not previously subject to asset freezes.

It remains unclear at this point whether the former Venezuelan leader has any assets in Switzerland.  Lawyers Swissinfo spoke to suggest that previous Swiss sanctions mean local banks are unlikely to hold such funds.

_{What measures were already in place against Venezuela ?}

Two laws allow Switzerland to freeze assets held by foreigners: the Embargo Act and the Foreign Illicit Assets ActExternal link (FIAA).

In 2018, the country aligned itself with European Union sanctions against Venezuela, including bansExternal link on supplying equipment for use by the military, or for internal repression and surveillance, as well as the imposition of asset freezes and travel bans.

Switzerland’s measures, under its Embargo Act, were a response to human rights violations and weakening of the rule of law and democracy in Venezuela, and identified 69 officials, including seven ministers and senior officials, the State Secretariat for Economic Affairs (SECO) told Swissinfo.

The federal actExternal link also allows for funds held by foreign so-called politically exposed persons or close associates to be frozen, confiscated and restored to their rightful owners if there’s a risk that they could be transferred abroad.

Venezuelan President Maduro, wife Celia Flores transferred to New York courthouse for arraignment Keystone / EPA

Does Maduro actually have funds in Swiss banks?

The government gave no indication in its announcement this month of any illicit funds held in the country by Maduro or others, and legal experts suggest there may be none.

In its written answers to Swissinfo, neither SECO nor the foreign ministry specified whether Maduro had assets in Switzerland.

“At this stage, no information can be provided regarding the amounts of the assets concerned,” a  foreign ministry spokesperson said.

Anti-corruption expert Mark Pieth Walter Bieri / Keystone

Holding Maduro’s money has been effectively prohibited for years and the statement in January doesn’t, in practical terms, represent new action over the previous sanctions, according to lawyer and anti-corruption expert Mark Pieth.

“Under this [earlier] framework, anyone who holds assets belonging to  Maduro or members of his close entourage is legally obliged to freeze them,” said Pieth,  who now heads a boutique law firm specialised in white-collar crime and Swiss criminal law. A bank holding such funds would have acted recklessly, risking its licence, and any suggestion that this is the first time Maduro’s assets were frozen in Switzerland would be misleading.

“The situation is fundamentally different when it concerns a dictator from a sanctioned country,” Pieth said. “In that case, additional legal constraints apply. This is why I say that holding assets belonging to Maduro has been prohibited for a long time.”

So why is Switzerland talking about freezing assets now?

The government said in its statement that the latest individuals targeted in its list, which included former president Maduro, weren’t previously named as subject to sanctions.

Alain Macaluso, a lawyer and director of the Centre for Criminal Law at the University of Lausanne ptan.ch

Under the law, the Swiss government may order the freezing of leaders’ assets when a foreign government or its members have lost power and there’s reason to believe assets have been acquired through corruption or other criminal offences, said Alain MacalusoExternal link, a lawyer and director of the Centre for Criminal Law at the University of Lausanne. The law doesn’t automatically apply to all dictators nor cover those still in power, he said.

Now that the US has deposed, arrested and charged Maduro, Switzerland is ensuring that it’s ready for any further demands by overseas prosecutors or governments.

“The decision of the Swiss authorities to freeze the assets is a special preventive measure, linked to the possibility of a future request for mutual legal assistance,” said Katia Villard, External linkan associate professor in the Department of Criminal Law at the University of Geneva. “What is important to keep in mind is that the fact that a leader may have money in Swiss banks does not mean that the banks are holding illicit funds”.

Villard gave the example of Russian President Vladimir Putin’s invasion of Ukraine.

“If  Putin had assets in Switzerland, and then in February 2022 launched the invasion of Ukraine, an atrocious act of war, that act has no direct impact on whether his assets in Switzerland are of licit or illicit origin,” she said.

Is Switzerland required to follow sanctions imposed by the US or elsewhere?

Even if Maduro has been sanctioned by third countries, such as the US, Switzerland isn’t legally required to follow them. The Swiss Confederation, wouldn’t be subject to so-called secondary sanctions, where measures are taken against a third party that has dealings with the individuals who have been targeted.

Swiss banks would still be wary of being hit by secondary sanctions or action by FINMA,External link the country’s Financial Market Supervisory Authority, so tend to avoid any dealings with such figures, according to Pieth . He also pointed to earlier enforcement actions to show that Switzerland has already taken a hard line on Venezuelan funds.

“Banks that handled Venezuelan oil money paid a heavy price,” he said. In past cases, dozens of banks were investigated for handling moneyExternal link linked to Venezuela’s state oil company, and BSI bankExternal link lost its licence as part of an international probe.
While the Embargo ActExternal link obliges the Swiss to comply with UN Security Council sanctions, there’s no requirementExternal link to follow action by the EU or others fully. Lists of individuals or entities covered by measures may be shortened to meet Swiss foreign policy needs.

Sanctions are implemented by SECO, while FINMA acts as an independent supervisor of the Swiss financial market supervising banks’ compliance with asset freezes.

What happens to any illicit money that’s found in Swiss banks?

The Swiss Confederation was first confronted with the issue of returning illicit assetsExternal link in 1986, starting with the case of former Philippine dictator Ferdinand Marcos. This was followed by cases involving former Haitian dictator Jean-Claude Duvalier and his circle, as well as Zaire’s dictator Mobutu Sese Seko. Since then, Switzerland has pursued a policy of provisionally freezing assets linked to ousted autocratic regimes and leaders.

While the decision to freeze assets is clear under Swiss law, their fate is not.

If any funds were linked to Maduro, the question would be whether they would go to the US or returned to Venezuela, according to Pieth. Most likely they would remain frozen until a stable government was in place in Venezuela, he said. “There is no clear legal basis for these assets to be transferred to the United States,” Pieth added.

If it’s established that assets were acquired illicitly and are subject to confiscation, Switzerland may enter into negotiations with a foreign state on a restitution agreement, the foreign ministry told Swissinfo. “The assets should benefit the population and must not be redirected back into channels of corruption,” it said.

Edited by Tony Barret/ac