Asset Recovery in cases of foreign politically exposed persons (PEPs)

As a major international financial centre, Switzerland is committed to the fight against global corruption. Asset recovery allows, under certain conditions, for illicitly acquired PEP assets to be frozen, confiscated and returned to the legal economic cycle. Switzerland has developed a diverse set of legal instruments to implement this process effectively.

©FDFA

Switzerland's foreign policy engagement is based on a value system that aims to promote the rule of law, justice, transparency, and social and economic welfare. The global problem of corruption is a hurdle to achieving these goals. Switzerland is taking measures to combat corruption at both domestic and international level in order to encounter this hurdle.

Assets held by politically exposed persons (PEP assets), which Switzerland has increasingly focused on in recent decades, are a particular challenge. These involve cases in which PEPs or their close associates illicitly enrich themselves and deposit their illegally acquired assets in various financial centres, including Switzerland.

Asset Recovery is a tool to combat this practice. Asset Recovery can be used to identify, freeze, confiscate and return to the legal economic cycle illicitly acquired PEP assets that have entered the Swiss financial centre despite preventive mechanisms. 

Illustration showing the Asset Recovery process in cases involving PEPs.
Illustration showing the Asset Recovery process in cases involving PEPs. ©FDFA © FDFA

Foreign politically exposed persons (PEPs)

PEPs are persons who have been entrusted with prominent public functions by a foreign country, for example heads of State or government, senior politicians at national level, senior government, judicial or military officials at the national level, important political party officials at national level and senior executives of State-owned corporations of national importance.

Legal framework

Since the fall of former Philippine President Ferdinand Marcos in 1986, Switzerland has continuously developed its set of instruments for dealing with PEP assets. Switzerland now has a wide variety of legal instruments at its disposal to take action against illicit PEP assets deposited in the Swiss financial centre. At the national level, these legal instruments allow for the identification, freezing, confiscation and return of such assets. These instruments are based on criminal law, mutual legal assistance legislation and administrative law.

Legal framework

Prevention of PEP cases

Switzerland seeks to promote itself as an innovative, interconnected and sustainable financial centre and contributes to the creation of a level playing field across financial centres. Its first priority is to prevent illicitly acquired PEP assets from entering financial centres, including the Swiss financial centre. To this end, Switzerland implements a variety of preventive measures at the domestic level.

Integrity of the financial centre (SIF)

Money Laundering Reporting Office Switzerland (MROS)

Fighting money laundering and terrorist financing (FDFA)

Freezing and confiscation of PEP assets

The first step in the Asset Recovery process is to identify and subsequently freeze PEP assets deposited in Switzerland which may have been illegally acquired. This is to prevent PEPs from withdrawing assets before their origin has been clearly established.

The second step is to confiscate PEP assets. The confiscation of illicitly acquired assets requires judicial proceedings for which cooperation between the Swiss and foreign authorities is essential. If it is established that the assets were illicitly acquired, a court can order their confiscation. On the basis of such court orders, PEPs are deprived of their assets.

Freezing and confiscation of PEP assets

Return of PEP assets

The return of illicitly acquired PEP assets is a key pillar of Switzerland's asset recovery policy. The final step is to return confiscated PEP assets to the legal economic cycle. In certain cases, the FDFA can negotiate a restitution agreement with the state of origin. The purpose of such agreements is to determine together with the state of origin the terms of the return, in particular how the assets to be returned will be used as well as the monitoring mechanisms. The assets returned shall benefit the population of the state of origin and not flow back into the system of corruption. To date, Switzerland has returned more than USD 2 billion to countries of origin pursuant to such agreements. Some of the most prominent cases include: 

Year Country Amount
2005 Angola I USD 24 million
2005                                 Nigeria I   USD 700 million 
2007 Kazakhstan I  USD 115 million
2012 Kazakhstan II USD 48 million
2012 Angola II  USD 43 million
2017  Nigeria II  USD 321 million
2020
Peru II  USD 16.3 million
2022 Uzbekistan  USD 131 million
     

Commitment at multilateral level

As illicitly acquired PEP assets are a transnational phenomenon, Switzerland is committed to strengthening international standards to combat corruption and facilitate the recovery of assets.

Switzerland has launched various initiatives to promote multilateral cooperation in the fight against illicitly acquired PEP assets. Since 2001, it has organised the Lausanne Seminars to facilitate the sharing of experience among states and experts. A number of solutions to current challenges in the field of asset recovery are also being developed within this framework. Another initiative is the Addis Process, aimed at developing international best practices for the return of assets.

Switzerland’s commitment at the international level

Last update 12.09.2022

  • Measures adopted by Switzerland in programmes on good governance in partner countries of its cooperation activities as well as strict legislation on countering money laundering prevent illicit assets of PEPs from entering Switzerland.

  • The Swiss Federal Council can freeze assets held in Switzerland by politically exposed persons. These persons include heads of state, senior officials and their entourage.

  • Switzerland must identify and return to the country of origin illicit assets that are found in Switzerland.

  • Switzerland's financial commitment to the International Centre for Asset Recovery (ICAR) in Basel and the Stolen Assets Recovery Initiative (StAR) of the UN and the World Bank

Contact

Asset Recovery

Kochergasse 10
CH – 3003 Bern

dv.asset.recovery@eda.admin.ch

Phone

+41 (0)58 484 54 21

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