Switzerland Stands at Crossroads Over Forfeiture of Russian Assets

In the wake of Russia’s invasion of Ukraine, Switzerland is facing a dilemma over the fate of frozen Russian assets. The Swiss government has been unable to forfeit the assets of sanctioned individuals and organizations under international law.

Legal Framework in Switzerland

According to legal experts, the current legal framework in Switzerland does not permit the confiscation of Russian assets without a criminal conviction. Article 70 of the Swiss Criminal Code, which allows for the forfeiture of assets linked to criminal offenses, is not applicable in this case.

Alternative Options

However, some experts suggest that article 72 of the Swiss Criminal Code could be used to confiscate assets linked to terrorist or criminal organizations. This provision has been used in previous cases, including:

• Seizure of funds stolen by former Nigerian dictator Sani Abacha
• Freezing of assets belonging to relatives of former Egyptian President Hosni Mubarak

Challenges and Uncertainties

Despite this option, it is unlikely that Swiss courts would classify President Putin’s government as a criminal organization, given the difficulties involved in defining the objectives of such an organization and gathering evidence.

Professor Mark Pieth suggests that President Putin and his inner circle could be classified as a criminal organization, with oligarchs acting as accomplices. However, no criminal prosecution has been initiated against them in Switzerland.

Swiss Parliament’s Response

To address the issue, the Swiss Parliament has adopted motions to create a legal basis for forfeiting frozen Russian assets, which could be used to compensate Ukraine for damages caused by Russia’s violations of international law. The Russian government has protested against this move, citing concerns over state immunity and describing it as “theft on a state level.”

EU’s Approach

The European Union has taken a different approach, deciding that central securities depositories holding large amounts of Central Bank of Russia assets must separate and account for extraordinary cash balances accumulating due to EU sanctions. The EU’s decision effectively freezes the revenues generated by these assets.

Switzerland is currently analyzing the EU’s position and has not yet decided whether to follow suit.

Uncertainty and Options

The decision on what to do with the frozen Russian assets remains uncertain, with options including:

• Using them to aid in Ukraine’s reconstruction
• Providing military equipment

Legal experts warn that any attempt to forfeit assets without a criminal conviction could lead to legal challenges from the owners of the assets and raise questions about the constitutionality of such a move.

Conclusion

The fate of Russia’s frozen assets in Switzerland remains uncertain, with many legal and ethical considerations at play. The Swiss government must navigate these complexities while also considering the broader implications for international law and relations.