Proposed legislation on freezing and restitution of ill-gotten assets of potentates

22/07/2013

In response to the political events in North Africa, commonly known as the 'Arab Spring', on 22 May 2013 the Swiss government proposed new legislation which is intended to create a legal basis for the freezing of assets presumed to have been obtained illegally by foreign political leaders and the restitution of such assets to the countries of origin, outside the framework of international mutual legal assistance proceedings.

The bill targets politically exposed persons and their families who have abused their positions to acquire assets unlawfully, notably through corruption, and who are seeking to hide such assets abroad. Due to its strong position as a financial centre, Switzerland has often had to deal with potentates' moneys over the past 20 years, and thus was a pioneer in developing rules to govern the handling of such matters. Cases that have attracted international attention include Ferdinand Marcos (Philippines), Sani Abacha (Nigeria) and Vladimiro Montesinos (Peru). According to information provided by the Department of Foreign Affairs, to date Switzerland has returned to the respective countries of origin no less than Sfr1.7 billion that had been embezzled by politically exposed persons.

While emphasising that it is determined to take a leadership role at international level to promote closer cooperation between financial centres, the Swiss government is aware that it is vital to tackle the problem of potentates' assets first at a domestic level. The draft act – the first of its kind worldwide – aims to provide a comprehensive set of measures for the Swiss authorities to trace, block and return efficiently such assets to the people who are entitled to them.

Publication
Proposed legislation on freezing and restitution of ill-gotten assets of potentates, ILO White Collar Crime Newsletter 22 July 2013
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Authors

Photo of Bernhard Lötscher
Bernhard Lötscher
Partner
Zurich