The Confederation should review its strategy for returning illicit assets blocked in Switzerland. The current legal bases are too vague. The procedures lack consistency and are often too long, notes the Federal Financial Control.
Over the past twenty years, Bern has returned nearly two billion francs from foreign public funds, concerning a dozen cases. Nearly one billion could be returned in the years to come, indicates the Federal Finance Control (CDF) in an audit published on Wednesday.
After the Arab Spring and the assets of former dictators Zine el-Abidi Ben Ali (Tunisia) and Hosni Mubarak (Egypt), other cases continued to hit the headlines, such as the 1MDB scandals in Malaysia, Petrobras in Brazil and the Karimova case in Uzbekistan.
Lack of criteria
Problem, the federal law on the blocking and the restitution of the patrimonial values of illicit origin, entered into force in 2016, concerns only the exceptional cases of a sudden change of regime. “Law of circumstance” drawn up in the wake of the Arab Spring, according to the CDF, it has been applied very little since.
International mutual legal assistance and criminal proceedings in Switzerland remain the main channels of investigation. But these fall under other legal bases and above all do not provide for conditions for the remittance of funds, notes the CDF. There are therefore no clear criteria explaining why restitutions follow one path rather than another.
The absence of clear criteria for refunds with or without conditions blurs the action of the Confederation and its coherence, in Switzerland and abroad, criticizes the Financial Control. As a result, despite its recognized activity in this area, Switzerland is struggling to find support among the countries of the South and emerging countries.
Cases involving politically exposed persons (PEPs), or even former leaders, generate strong expectations in the countries concerned, recalls the CDF. However, there is a big gap between the length of legal proceedings and political concerns. It takes between 10 and 15 years to have a decision to confiscate or release the funds.
“The Confederation has often promised too many results too quickly. This generates frustration and a real mismatch with intentions,” reads the audit. Switzerland, however, displays the principle of returning the assets “as quickly as possible”.
Another problem is that there is no overview of the cases concerning potentates or of what happens to the blocked sums, continues the Financial Control. Only cases for which restitution procedures have been defined are followed up by the Federal Department of Foreign Affairs (FDFA).
Information on unconditional restitution cases involving PEPs is “very patchy and incomplete.” They are dispersed between the Federal Office of Justice (OFJ) and the prosecutors. An annual monitoring of the blocked funds, with the result of the procedures and the destination of the confiscated funds, should be set up, estimates the CDF.
New strategy coming soon
Financial Control recommends that the Federal Council now set clear criteria to determine in which cases refunds are subject to conditions. And who decides which way to go.
The government, in its response, announces a project for a new strategy, which it should present in 2022. The Council of States has also taken up the issue, submitting a postulate in 2019 on the monitoring of asset restitution illicit.
ats / jfe
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