The Swiss Federal Council has extended for one year the freeze on the assets of ousted presidents Ben Ali (Tunisia) and Yanukovych (Ukraine) and their entourages. The decision was reached to support the judicial cooperation between Switzerland and the two countries.
On a similar issue the Council, in cognizance of the recent mutual legal assistance procedure between Switzerland and Egypt, decided to lift with immediate effect the freeze on assets of this country.
At the beginning of 2011, the Federal Council reacted immediately to the uprisings taking place at the time in a number of Arab countries by ordering, as a preventive measure, a freeze on the assets in Switzerland of ousted presidents Ben Ali and Mubarak and of politically exposed persons among their entourages. It subsequently announced a similar freeze in the context of the crisis in Ukraine in February 2014.
The Federal Act on the Freezing and the Restitution of Illicit Assets held by Foreign Politically Exposed Persons (FIAA), which came into force on 1 July 2016, governs the duration of freezes and annual extensions to them. An extension is possible if cooperation within the framework of mutual legal assistance bears fruit.
The freezes on the Tunisian assets (CHF 56 million) and the Ukrainian assets (CHF 70 million), which were extended by one year on the basis of a Federal Council decision on 9 December 2016, expire in January and February 2018 respectively.
During the years since these freezes entered into force, several proceedings have been initiated against the main individuals concerned, and the authorities of these countries have taken steps to advance these cases at the judicial level. Court rulings are, however, still required to determine whether or not the origins of the frozen assets are illicit; settlement agreements sanctioned by the judicial authorities of these countries can constitute an alternative solution.
The Federal Council's decision to extend the freeze on the assets is warranted because this objective has not yet been fully met while the legal conditions for its extension remain valid. This one-year extension is expected to yield tangible progress in pending proceedings and increase the likelihood of the assets being returned to the country of origin.
In the Egyptian context, the freeze dates back to 2011 and covers an initial amount of approximately USD 700 million. In keeping with the preventive nature of the measure, however, the fact of being listed in the ordinance on frozen assets does not necessarily mean that the persons concerned hold assets in Switzerland. In particular, this was not the case with former president Hosni Mubarak.
Since 2011, the amount of Egyptian assets frozen in Switzerland has been progressively reduced to about CHF 430 million following the delisting of names from the ordinance at the request of the Egyptian authorities, who have in the meantime concluded reconciliation agreements in Egypt. Together with several acquittals and classification decisions, these agreements contributed to the decision of the Egyptian judiciary to drop criminal proceedings in the most prominent cases with possible links to assets frozen in Switzerland.
For this reason and in the absence of tangible results at the end of August 2017 the Swiss judicial authorities closed the mutual legal assistance procedures on cases with potential links to assets frozen in Switzerland. After almost seven years since the freeze was imposed in 2011 and despite the joint efforts undertaken, the cooperation between the two countries has failed to produce the anticipated results.
With the closure of the mutual legal assistance procedures, realistic prospects of the restitution of the assets no longer exist within the framework of mutual legal assistance. The freeze on the Egyptian assets on the basis of the FIAA therefore has no further purpose as defined by law and in jurisprudence, which the Federal Council noted when lifting it with immediate effect. This decision, however, will not result in the release of these assets (approx. CHF 430 million). They remain impounded within the framework of criminal proceedings in Switzerland being conducted by the Office of the Attorney General of Switzerland for the purpose of determining whether or not their origin is licit.