Yevgeny Adamov, the former Russian nuclear minister accused of fraud, is to remain in custody in Switzerland pending a decision on his extradition.
The Federal Court in Lausanne upheld an appeal by the Swiss government against a criminal court ruling that he be freed.
In a ruling made public on Tuesday, the Federal Court rejected an appeal from Adamov, whose lawyers had called his detention a violation of his immunity as a former government official.
"Adamov stays in custody," spokesman Igor Petrov said after the Russian embassy in Bern received the ruling.
"The whole extradition procedure will be continued. Then the main work will be in the hands of the Swiss justice ministry."
Adamov was arrested in Switzerland on May 2 on a warrant from the United States, which accuses him of stealing money earmarked for improving Russia’s nuclear security and which wants him extradited to face fraud charges.
Moscow later called on Switzerland to send him home.
Last month the Federal Criminal Court in Bellinzona ruled that Adamov should not have been arrested as he was in Switzerland to answer questions in a court case about the financial activities of his daughter, a Swiss resident.
The Federal Court in Lausanne has now rejected that ruling in favour of the justice ministry.
Adamov has since been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of conspiracy to transfer stolen money and securities, conspiracy to defraud the US, money laundering and tax evasion.
Washington says he diverted up to $9 million (SFr11.75 million) of Energy Department funds intended to improve Russian nuclear security.
The ex-minister has not denied that he put money into private accounts but has said this was normal practice in Russia to shield money from hyperinflation, an unstable banking system and the corruption that was rife after the collapse of communism.
The Russian authorities are apparently concerned that Adamov could divulge nuclear secrets if extradited to the US, and have demanded he be returned home.
Switzerland now has to consider whether to grant or reject the extradition requests.
Under international law, Switzerland will have to make its decision based on the seriousness and location of the alleged crimes, the dates of the extradition requests and the nationality of the person involved.
No date has yet been set for a ruling on Adamov’s extradition.
swissinfo with agencies
Yevgeny Adamov was Russia’s atomic energy minister from 1998 to 2001, when a parliamentary commission accused him of corruption.
Adamov was arrested in Bern on May 2 on a warrant from the United States.
He is charged by the US with embezzling $9 million which had been destined for nuclear-safety upgrades in Russia.
Adamov also faces extradition to Russia, which handed a formal request to the Swiss authorities on May 17, on fraud charges.