Money & Industry

Switzerland Proposes New Law Governing Embezzled Funds by Ousted Dictators

Switzerland Proposes New Law Governing Embezzled Funds by Ousted Dictators
Bernadine Racoma

On Wednesday, the Swiss government has announced that it is working on a new law that simplifies blocking, freezing and restituting funds of embezzled funds by ousted dictators from foreign governments. This is part of Switzerland’s current efforts at restituting assets to a number of countries that were formally under autocratic rule.

In the recently released statement, the legislation being formulated is designed to regulate the administrative confiscation of the assets of former dictators and facilitate the return to the countries of origin.

First of its kind

The pre-legislation proposal has already been presented to the Swiss Parliament. This is the first proposal of its kind to be put forward in the world, according to the Swiss Foreign Ministry. The proposal specifies a number of rules that are already in place with regard to freezing dictators’ funds. Additional elements include simplification of the process of restitution. This will be done with standardization of procedures and simplification of the process in general. In effect stolen assets by foreign leaders may be frozen more easily and they may be returned more readily to the countries of origin.

A quarter of a century of restitution

For the past 25 years, Switzerland has been restituting the frozen assets of dictators to their respective countries. Switzerland has already restituted around $1.75 billion to Nigeria, Peru, and the Philippines. The restituted funds came from the blocked assets that were embezzled by Sani Abacha (Nigeria), Vladimir Montesinos (Peru) and Ferdinand Marcos (Philippines).

In 2011, Switzerland has frozen 60 million Swiss francs from Zine el Abidine Ben Ali, The Tunisian dictator. The country did the same to the $700 million in assets of Hosni Mubarak of Egypt. And 100 million Swiss francs each have been blocked from Libya and Syria.

Current difficulties and limitations

The Swiss hope that the new law will make sure that former dictators cannot lay claim to frozen funds just because their countries have made mistakes in requesting for international judicial cooperation. Oftentimes, the new heads of state of formerly autocratic countries encounter difficulty while making the requests because of their lack of experience on the mater. Requests that are not made properly are not processed. Also, when there is confusion or misunderstanding of procedure, Bern cannot move forward to block or restitute the assets.

Provisions of the new law

With the new law, Switzerland will be able to block assets immediately when a dictator falls from power. There are other provisions that will definitely prove helpful to foreign governments involved in embezzling issues. The new law includes providing training for legal counsel and other authorities to help countries recover funds. The law would also specify measures that are required in making the request. The Swiss would even be able to provide the authorities in the respective countries formerly guarded banking details.

Other important details of the proposal

As for the banks that are managing the embezzled funds, they are obligated to report suspicious accounts immediately so that the Swiss Foreign Ministry can take appropriate action. If this is not done as indicated in the legislation, the bank would need to pay fines amounting to as much as 250,000 Swiss francs.

Photo Credit: Swiss Bank Office

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