The Federal Court says more than $130 million in Swiss bank accounts linked to Raul Salinas, the brother of a former Mexican president, will stay frozen.
In its ruling published on Thursday, the court rejected an appeal by Salinas' wife against an earlier decision by the investigating authorities to keep the money blocked.
The decision enables the Mexican justice authorities to confiscate the assets frozen since 1995 if they present a legal order to their Swiss counterparts.
Switzerland handed over the case of suspected money laundering by Salinas – brother of former president Carlos Salinas – to Mexican officials in 2002.
The court called on the Swiss authorities to closely follow the proceedings in Mexico where Salinas still faces charges of illegal enrichment.
Salinas claims the millions of dollars found in overseas bank accounts were legitimate - not the product of money laundering or political payoffs as prosecutors have suggested.
Paulina Castanon argued that keeping the money frozen for 12 years was excessively long and infringed the principle of proportionality.
But the court referred to the complexity of the case and said the length of the proceedings was not the fault of Switzerland.