On 22 May the Swiss Government proposed a new law to make it easier to recover the proceedings of corruption squirreled away by foreign public officials. The draft Act, proudly described by the Swiss Ministry as “the first of its kind in the world”, would allow Switzerland to freeze the assets of politically exposed persons as a preventative measure which would be supported by procedures to confiscate and return those assets to the countries that were the victim of the theft. The Swiss Foreign Ministry stated that:
“The preliminary draft adopted by the Federal Council during its meeting of 22 May proposes a single act providing for the freezing, confiscation and restitution of potentates' assets which incorporates Swiss practice in this domain, i.e. the measures Switzerland has taken over the past 25 years. The preliminary draft provides for the preventive freezing, as a precautionary measure, of assets of politically exposed persons. In addition, it establishes procedures for the administrative confiscation and restitution of potentates' assets. Lastly, it provides for targeted measures that make it possible to support the State of origin in its efforts to obtain the restitution of assets of criminal origin transferred abroad.”
Viktor Vavricka, head of Switzerland's asset-recovery task force, said in an email “that the law would allow the Swiss to confiscate assets even when the affected state cannot supply the necessary legal support, for example, because of conflict within the country”. It will be interesting to fully understand how this new pioneering piece of legislation substantively differs from The Swiss Restitution of Illicit Assets Act, otherwise known as Lex Duvalier, which came into force on 1 February 2011. That law allows the Swiss Government to bring proceedings against assets of its own volition subject to two requirements: (1) the victim state must have asked the Swiss authorities for a preliminary freezing of the assets, and (2) the victim state must be incapable of cooperating fully in the asset recovery process, due to the collapse or non-availability of the judicial system.
The new law proposed on 22 May is likely to respond to the criticism from a number of quarters that the law did not assist Arab Spring countries such as Libya, Tunisia and Egypt who could hardly argue long-term that their judicial or governmental systems had collapsed.
Separately, the Swiss government recently announced plans to broaden its anti-corruption laws so that it covers both public and private corruption, which would mean its laws would be similar in scope to the UK Bribery Act. The suggested legislative change follows widespread criticism of businesses and particularly international sports organisations based in Switzerland, including FIFA, concerning corruption. The Swiss Cabinet has now commissioned a report into the issue of private corruption and has opened a public consultation as to whether corruption should be considered an offence under its penal code. That consultation is due to end on 12 September 2013.
Switzerland is certainly taking some positive steps to combat corruption, and the proposed new law concerning the freezing and restitution of asset stolen by PEPS, could be a game changer. In seeking to reform its image as a safe haven for corrupt money, enacting laws will not be enough, the Swiss Government will need to actually utilise them and ensure that said money is returned to the victim country. It will be interesting to see how other countries, including the UK, react to this decisive initial legislative step taken by Switzerland.