The Federal Criminal Court has rejected a request from Iran to grant legal assistance involving a Portuguese national suspected of fraud.
The businessman is being sought on charges of accepting $120 million for the purchase of an Airbus, but who instead pocketed the money for himself and his family.
The Iranian government wants Switzerland to freeze bank accounts believed to belong to the suspect and his family, and for information on the assets.
The Swiss justice authorities, in principle, agreed to the request last year on condition Iran provided a series of guarantees that it would respect the human rights of any person taken into custody.
These included assurances that Tehran would rule out corporal punishment as well as the death penalty, and that representatives of the Swiss government would have the right to visit defendants at any time.
However, the judges of the Federal Criminal Court question the credibility of any guarantees coming from the Iranian government due to its poor human rights record.
The court said the United Nations has documented cases of arbitrary detentions, torture, the death penalty and other human rights abuses.
swissinfo.ch and agencies