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

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 (PDF, 1 Page, 170.4 kB, English) 

The main cornerstones of Switzerland's policy for dealing with illicit PEP assets are set out in the strategy adopted in 2014.

Switzerland's strategy on the freezing, confiscation and restitution of illicit assets of PEPs (Asset Recovery) (PDF, 24 Pages, 522.1 kB, German)

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

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

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: 

Restitution of illicitly acquired assets

No Dirty Money: The Swiss Experience in Returning Illicit Assets (2016) (PDF, 32 Pages, 4.2 MB, English)

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