Restitution of Illicit Assets Act passed by Swiss Parliament

I hadn’t realised that this law had already passed if it weren’t for a tweet from Pakistan (Hat Tip: Syed Ali Raza Abidi)

On October 1, 2010, the both houses of the Swiss Parliament passed a new law that will somewhat facilitate the restitution of “potentate funds”, or assets of politically exposed persons (PEPs) who are most likely illicit. The law closes a gap in Swiss law that lead to difficulties when the government in question fails to cooperate in the restitution of the funds. As the Federal Council wrote in its Dispatch (Message accompanying a law submitted to Parliament):

Nevertheless, the growing phenomenon of so-called “failing states” has shown up the limits of the system, in particular in the Mobutu and Duvalier cases. The draft law therefore comes into existence as a result of difficulties encountered by the Swiss authorities in returning assets frozen in Switzerland to such states following the failure of the process of international mutual assistance to produce a satisfactory result.

The vote was Ständerat (State Council) voted 41 yes to 0 no, while the Nationalrat (National Council) voted 161 yes to 32 no.

It remains to be seen whether future cases will be handled with less issues than previous ones since much depends on the corporation of the countries in question. As the Federal Department of Foreign Affairs writes on its website:

Restitution of potentate funds

Potentate funds that manage to enter Switzerland despite comprehensive precautionary measures have to be identified and repatriated to their country of origin. This so-called restitution is an important instrument in the Switzerland’s policy of combating illegal monies. Therefore Switzerland has returned about CHF 1.7 billion to their countries of origin, which is more than any other financial center of a comparable size. Individual cases attract considerable publicity on account of the high profile of the people and the amounts of money involved. Examples include:

the Montesinos case, Peru, 2002
the Marcos case, the Philippines, 2003
the Abacha case, Nigeria, 2005
the Angolese assets case, Angola, 2005
the Kazakh assets case, Kazakhstan, 2007
the Salinas case, Mexico, 2008

Some cases are particularly complex to solve. Among them, one can mention the Mobutu case (Democratic Republic of Congo/DRC) and the Duvalier case (Haiti). In the Mobutu case, Switzerland strove during 12 years to return the frozen assets to the DRC. This challenge finally failed among others because of the lack of cooperation of this State. In these circumstances, the Federal Criminal Court of Switzerland (FCC) ruled on 14.07.2009 against pursuing a complaint regarding these assets. The freezing of Mobutu’s assets in conformity with the decision taken on 30.04.2009 by the Federal Council (Swiss Government) has therefore been lifted.

Below is the English text. Beware though that English is not an official language of Switzerland and the English translation is for informational purposes only. Only the French, Italian and German versions are relevant in law.

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