Four members of the extreme rightwing Party of Nationally Orientated Swiss (PNOS) have been found guilty of racial discrimination.
PNOS has already been the subject of controversy after two of its members were recently elected to serve in local politics.
The verdict, which was confirmed by officials on Monday, was handed down by a district court in canton Aargau. Party president Jonas Gysin was among those penalised.
The party said on Tuesday that the four would launch an appeal.
The court found that the party leaders had publicly disseminated an ideology which was aimed at belittling or slandering people of certain races, religions or ethnic origins.
It also condemned the members for publishing the party manifesto which advocated collective abuse of foreigners and called for non-Swiss people to be repatriated.
The four now have to pay fines ranging between SFr300 ($232) and SFr500. They have until the beginning of September to appeal.
Heinz Kaiser, a project leader with World Citizens, an international peace organisation, filed a complaint against the rightwing group in 2003.
In the same year PNOS had conducted a poster campaign during the federal parliamentary elections, taking material used by the Swiss National Socialists in the 1930s.
The party, which was founded in summer 2000, has enjoyed some success as a political force in local politics after two of its members were elected to serve in local government.
Dominic Bannholzer was elected to the government in the commune of Günsberg in northern Switzerland in May 2005.
Six months earlier Tobias Hirschi gained a seat in the local parliament in the commune of Langenthal in canton Bern.
PNOS is estimated to have between 100 and 130 members and is particularly active in central Switzerland and around Basel.
This is not the first time that members of the party have been alleged to have racist views. The federal authorities’ 2004 report on extremism found that the party programme, newspaper and other PNOS publications were characterised by "xenophobic, antidemocratic and rightwing extremist rhetoric".
swissinfo with agencies
According to the 2004 report on extremism there are between 100 and 130 PNOS members in Switzerland.
Around 60 belong to sections in and around Basel.
PNOS was founded in summer 2000.