Asset recovery: the assets of foreign politically exposed persons

From constitutional emergency powers to a statute

Switzerland’s policy on the assets of fallen rulers is described historically in Part F, from the freezing of the Marcos accounts in 1986 to the return of the Abacha funds. For decades the legal basis for freezing such assets outside ordinary mutual assistance was the Federal Constitution itself. Article 184 paragraph 3 authorises the Federal Council to issue ordinances and rulings where the safeguarding of the interests of the country so requires, and Article 185 gives it comparable powers for the protection of internal and external security.¹ Emergency ordinances of this kind were used for the Marcos and Mobutu assets under the former constitution. In 2011 the Federal Council relied on the same power for the assets connected with the regimes of Ben Ali in Tunisia and Mubarak in Egypt, and in 2014 for those of the entourage of Viktor Yanukovych in Ukraine.²

The Duvalier case exposed the limits of this approach. When mutual assistance with Haiti failed because the Haitian judicial system could not conduct proceedings, the Federal Supreme Court held in 2010 that the Duvalier assets could not be forfeited under the ordinary rules because the offences were time-barred. Parliament responded with the Restitution of Illicit Assets Act of 2010, known as the Lex Duvalier, which allowed forfeiture in cases of failed states.³ That Act was replaced by a comprehensive statute, the Federal Act of 18 December 2015 on the Freezing and the Restitution of Illicit Assets held by Foreign Politically Exposed Persons, known in German as SRVG and in English as the Foreign Illicit Assets Act (FIAA). It entered into force on 1 July 2016.⁴

The Foreign Illicit Assets Act

The Act governs “the freezing, confiscation and restitution of assets held by foreign politically exposed persons or their close associates, where there is reason to assume that those assets were acquired through acts of corruption, criminal mismanagement or by other felonies”. It provides for two kinds of freezing. The first, under Article 3, is a precautionary freezing with a view to mutual assistance. The Federal Council may order it where the government of the country of origin has lost power or a change of power appears inevitable, where the level of corruption in that country is notoriously high, where it appears likely that the assets were acquired through corruption or other crimes, and where the safeguarding of Swiss interests requires the freeze. Such a freeze is limited to four years. The Federal Council may extend it by one year at a time, up to a maximum duration of ten years.

The second kind of freezing, under Article 4, serves as a basis for forfeiture. It applies when mutual assistance fails, typically because the state of origin cannot meet the requirements of a mutual assistance procedure owing to the total or partial collapse of its judicial system. The Federal Department of Finance may then bring an action for forfeiture before the Federal Administrative Court. The court orders forfeiture if the assets are at the disposal of a politically exposed person or a close associate, are of illicit origin and were frozen under Article 4. Forfeiture is not subject to a limitation period. Under Article 15, illicit origin is presumed where the wealth of the person increased exorbitantly in connection with the exercise of a public function and the level of corruption in the country was notoriously high during that period. The presumption is rebutted if it is shown “with overwhelming probability” that the assets were acquired lawfully.⁵

The Act also imposes duties on the financial sector. Persons and institutions that hold or manage assets of persons covered by a freeze must report them immediately. The Confederation may assist the country of origin in its efforts to obtain restitution, for example by providing legal advice, by organising international meetings or by seconding experts. Articles 17 and 18 set out the principles of restitution. Returned assets must serve to improve the living conditions of the population of the country of origin or to strengthen the rule of law there, and the Federal Council concludes agreements with the recipient state for that purpose. The Federal Department of Foreign Affairs, through its Section Asset Recovery in the Directorate of International Law, administers this system and supports the judicial authorities of the countries concerned.⁶

Freezes in practice

The list of freezes under the Act and its predecessors is a short history of political upheaval since 2011. The Tunisian freeze expired on 18 January 2021, when it reached the ten-year limit. The Egyptian freeze was lifted on 20 December 2017 after the criminal proceedings in Switzerland had been discontinued. The Ukrainian freeze expired on 27 February 2023, when the Federal Council moved to forfeiture proceedings concerning more than CHF 130 million. In 2025 and 2026 two new freezes were added. The assets of Bashar al-Assad and his entourage have been frozen since 7 March 2025, and those of Nicolás Maduro and his associates since 5 January 2026.⁷

The Venezuelan freeze illustrates how the instrument works. Following the removal of Maduro from power, the Federal Council ordered on 5 January 2026 the freezing of any assets held in Switzerland by him and persons associated with him, excluding members of the current Venezuelan government, for four years with immediate effect. The Federal Council explained that the decisive factor was that a fall from power had occurred and that it had become possible for Venezuela to initiate legal proceedings. It noted that sanctions against Venezuela had been in force since 2018 under the Embargo Act, while the new measure reached persons who had not been sanctioned so far. The press release gave no figures on the amounts frozen.⁸ The distinction between the two regimes is important for banks in Zurich. Sanctions under the Embargo Act, dealt with in the preceding chapter, serve foreign policy aims and are lifted when those aims are achieved. A freeze under the Foreign Illicit Assets Act serves a future restitution and can end in forfeiture.

The Ukrainian forfeiture proceedings are the first real test of the Act. On 15 February 2023, the Federal Council instructed the Federal Department of Finance to bring forfeiture actions before the Federal Administrative Court concerning more than CHF 130 million from the entourage of the former president.⁹ The actions test whether the statutory model of forfeiture in the absence of a foreign judgment can function in contested cases.

Restitution practice and figures

Switzerland describes itself as a leading state in the restitution of illicit assets. The Federal Department of Foreign Affairs states that Switzerland has returned over USD 2 billion to foreign states. It names three principles for restitution: transparency and accountability, the benefit of the population of the country of origin, and monitoring mechanisms to prevent the returned funds from flowing back into corrupt channels.¹⁰ An older non-paper of the same department lists the main cases. The Marcos assets of USD 684 million were returned to the Philippines in the late 1990s after a Federal Supreme Court ruling, partly to compensate victims of human rights violations. In 2002 Peru received USD 92 million in the Montesinos case, channelled through a national fund for corruption proceeds. Nigeria received about USD 700 million of Abacha assets in 2005, followed later by a further USD 321 million under World Bank monitoring. Kazakhstan received USD 115 million in 2007 through the independent BOTA Foundation for children and youth, and a further USD 48 million in 2012 under World Bank fiduciary responsibility. Angola received USD 24 million in 2005 and USD 43 million in 2012 for humanitarian, education and agriculture projects.¹¹

Zurich played a direct role in the Montesinos case. After Swiss banks had reported accounts linked to Vladimiro Montesinos, the former head of the Peruvian intelligence service, to the Money Laundering Reporting Office in October 2000, the Examining Magistrate’s Office IV of the canton of Zurich opened criminal proceedings. The investigation showed that Montesinos had received commissions on arms deliveries amounting to 18 per cent of the purchase price in more than thirty transactions. On 12 June 2002 the Zurich examining magistrate ordered the transfer of the assets, and a first transfer of USD 77.5 million was made on 20 August 2002. The Stolen Asset Recovery Initiative of the World Bank and the United Nations Office on Drugs and Crime records further returns of USD 16.3 million in 2020 under a trilateral agreement with Luxembourg, and a decision of the Federal Supreme Court of May 2023 clearing the return of a further USD 8.5 million in a non-conviction-based forfeiture case.¹²

The second Abacha return became a model for monitored restitution. The agreement between Switzerland, Nigeria and the World Bank was signed in Washington. The USD 321 million, which the Geneva prosecutor had confiscated, were used to finance the National Social Safety Net Project, which makes cash transfers to poor households. For the first time in such a case, civil society organisations took part in drafting the agreement. Critics nevertheless pointed out that a substantial part of the USD 700 million returned in 2005 had disappeared, which explained the stricter monitoring of the second return.¹³

The Uzbek case applied the model to a new setting. In the criminal proceedings opened by the Office of the Attorney General in 2012 against Gulnara Karimova, daughter of the former president of Uzbekistan, and others, large sums were forfeited. In August 2022 the Federal Council and the government of Uzbekistan signed an agreement under which the assets would be used for the benefit of the population of Uzbekistan through a United Nations trust fund.¹⁴ The first tranche amounted to about USD 131 million. A second agreement, signed in Tashkent on 6 February 2025, provides for the return of about USD 182 million through the United Nations Uzbekistan Vision 2030 Multi-Partner Trust Fund, to be used for socially significant projects, in particular in public health and education. The total therefore amounts to about USD 313 million.¹⁵

Official and independent figures differ. A study by Maria Gabriela Sarmiento, based on doctoral research, counts more than USD 3.1 billion restituted by Switzerland, including over USD 1 billion to Nigeria, USD 684 million to the Philippines, USD 567 million to Brazil and USD 313 million to Uzbekistan. She notes that there is no single official register of frozen, forfeited and returned assets.¹⁶ The Swiss Federal Audit Office had already criticised in 2022 that information on restitution cases was “very patchy and incomplete”, that the authorities lacked an overview of the use of returned funds and that confiscation rulings had sometimes taken more than fifteen years. It recommended greater transparency over the use of frozen and confiscated funds.¹⁷

Notes

1. Arts. 184 para. 3 and 185 para. 3 of the Federal Constitution of the Swiss Confederation of 18 April 1999, SR 101. Under Art. 184 para. 3 second sentence, ordinances must be limited in time (“Verordnungen sind zu befristen”), https://www.droit-bilingue.ch/de-fr/1/10/101-184-218.html and https://www.droit-bilingue.ch/de-fr/1/10/101-185-219.html. ↩
2. “Freezing, Forfeiture and Restitution of Illicit Assets of Politically Exposed Persons Abroad: New Regime Applicable as of July 1st, 2016”, Lexology briefing, https://www.lexology.com/library/detail.aspx?g=0961c38c-b139-4c25-ad88-333db2188d50. The briefing explains that the new Act replaced the emergency constitutional measures used during the Arab Spring and the Ukraine crisis. ↩
3. Federal Act of 1 October 2010 on the Restitution of Assets Illicitly Acquired by Politically Exposed Persons (RIAA), AS 2011 275, repealed by Art. 31 of the Foreign Illicit Assets Act of 18 December 2015 (FIAA), which entered into force on 1 July 2016, https://www.droit-bilingue.ch/de-fr/1/19/196.1-31-34.html and https://www.droit-bilingue.ch/de-fr/1/19/196.1-33-36.html. See Part F on the Duvalier case. ↩
4. Foreign Illicit Assets Act (FIAA) of 18 December 2015, SR 196.1, unofficial English translation circulated to the UNCAC Working Group on Asset Recovery, https://www.unodc.org/documents/treaties/UNCAC/WorkingGroups/workinggroup2/2016-August-25-26/V1605154e.pdf. ↩
5. FIAA, Arts. 1, 3, 4, 6, 14 and 15, unofficial English translation, https://www.unodc.org/documents/treaties/UNCAC/WorkingGroups/workinggroup2/2016-August-25-26/V1605154e.pdf. Art. 16 protects the rights of Swiss authorities and of third parties who acquired rights in good faith. ↩
6. Federal Department of Foreign Affairs (FDFA), “Freezing of assets”, https://www.eda.admin.ch/en/freezing-of-assets. ↩
7. FDFA, “Freezing of assets”, https://www.eda.admin.ch/en/freezing-of-assets, listing current and expired freezes. The Libyan freeze of 2011 was absorbed into the UN and EU sanctions regime. ↩
8. Swiss Federal Council, “Federal Council freezes any assets held in Switzerland by Nicolás Maduro”, media release of 5 January 2026, https://www.admin.ch/en/newnsb/4mdMVbqPTwY-5XoVHeNVP. ↩
9. Swiss Federal Council, “Over CHF 130 million from entourage of former Ukrainian President Yanukovych targeted in confiscation proceedings”, media release of 15 February 2023, https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-93078.html. The release stresses that the proceedings are unrelated to the sanctions against Russia adopted in 2022. ↩
10. FDFA, “Return of illicit assets of foreign politically exposed persons (PEPs)”, https://www.eda.admin.ch/en/restitution-of-illicitly-acquired-assets. ↩
11. FDFA, “Switzerland’s Experience in Repatriating Illicitly Acquired Assets (PEP)”, non-paper, https://www.eda.admin.ch/dam/fr/sd-web/vLXkW-zmgeBG/09-cas-de-restitution_en.pdf. The document states that “Switzerland has returned about USD 2 billion to the countries of origin”. ↩
12. Stolen Asset Recovery Initiative (StAR), Asset Recovery Watch database, “Vladimiro Montesinos – Switzerland chapter”, https://star.worldbank.org/asset-recovery-watch-database/vladimiro-montesinos-switzerland-chapter. ↩
13. Julia Crawford, “Is the Abacha accord a model for returning ‘dictator funds’?”, JusticeInfo.net, 8 March 2018, https://www.justiceinfo.net/en/36633-is-the-abacha-accord-a-model-for-returning-dictator-funds.html. ↩
14. Swiss Federal Council, “Restitution of illicit assets: Switzerland and Uzbekistan sign agreement”, media release of 16 August 2022, https://admin.ch/gov/en/start/documentation/media-releases.msg-id-89949.html. ↩
15. Embassy of Switzerland in Uzbekistan, “Information on the ‘Agreement regarding the sharing of forfeited assets’ between the Swiss Federal Council and the Government of the Republic of Uzbekistan”, February 2025, https://www.eda.admin.ch/countries/uzbekistan/en/home/news/news.html/content/countries/uzbekistan/en/meta/news/2025/February/restitution. ↩
16. Maria Gabriela Sarmiento, “Switzerland: The Opaque World of Asset Recovery” (guest blog), UNCAC Coalition, 13 May 2025, https://uncaccoalition.org/switzerland-and-grand-corruption-the-opaque-world-of-asset-recovery. ↩
17. SWI swissinfo.ch, “Swiss asset restitution strategy comes in for criticism”, 27 January 2022, https://www.swissinfo.ch/eng/politics/swiss-asset-restitution-strategy-comes-in-for-criticism/47296700. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.