Swiss Freeze Order Targets Assets in Non-Cooperative Jurisdictions

The Swiss government’s freeze order, based on Article 3 of the Federal Act on Freezing and Seizure of Illegally Obtained Assets (FIAA), aims to prevent assets from being transferred to non-cooperative jurisdictions. This provision goes beyond cases where evidence of criminal origin has already been produced, covering a broader range of assets.

Reporting Duty and Cooperation

The freeze order not only freezes assets located in Switzerland but also requires reporting and cooperation from individuals and institutions aware of the existence of such assets due to their professional activities. Swiss banks and land registers are particularly affected by this requirement. The Money Laundering Reporting Office Switzerland (MROS-CH) is responsible for monitoring compliance with these obligations, even if the procedure does not involve money laundering.

Mutual Assistance in Criminal Matters

Once assets have been frozen in Switzerland, criminal proceedings must be opened in the country. In most cases, Swiss authorities will wait for the affected state to request mutual assistance in criminal matters under Article 75a of the International Mutual Assistance Act (IMAC). This approach was taken in high-profile cases involving Alstom, Stanford Group, and Nitrochem.

New Measures to Facilitate Asset Recovery

Recent changes to the FIAA aim to facilitate asset recovery by allowing Swiss authorities to provide information to affected states experiencing failures of state structures or facing threats to the life or physical well-being of individuals concerned. The MROS-CH can also provide intelligence without revealing the source, and national interests or public security concerns do not justify withholding this information.

Limitations on Freeze Orders

The initial freeze order may last up to ten years and must be renewed annually after an initial period of four years. However, Swiss authorities must continually verify the proportionality of these measures and consider the importance of public interests involved.

Confiscation through Independent Swiss Criminal Procedure

While mutual cooperation is often necessary for asset recovery, Switzerland’s independent criminal procedure can also lead to confiscation in certain cases, such as money laundering offenses or private bribery. Examples of successful independent Swiss criminal proceedings include those against Alstom, Stanford Group, Nitrochem, and Odebrecht.

Conclusion

These developments demonstrate Switzerland’s commitment to combating corruption and recovering stolen assets, while emphasizing the importance of cooperation with foreign authorities in achieving these goals.