ZURICH • Switzerland will implement a new law in July to help seize and repatriate illicit wealth parked in its banks by foreign dictators, the government has said.
The move is aimed at helping Switzerland and its wealth management industry shake off their image as a secretive haven for ill-gotten riches.
This issue was in the news again this week when the Monetary Authority of Singapore ordered the closure of Swiss private bank BSI's operations locally, and Swiss prosecutors began criminal proceedings against BSI in the biggest international crackdown on financial entities dealing with a scandal-hit Malaysian government fund.
The Swiss Cabinet agreed to implement from July 1 a law that lets the authorities seize and return funds that foreign leaders looted, even in cases that cannot be resolved through standard international requests for mutual legal assistance.
Three ordinances cover assets previously seized as a precaution from former presidents Zine El Abidine Ben Ali of Tunisia, Hosni Mubarak of Egypt and Viktor Yanukovych of Ukraine and their inner circles, although all three expire early next year.
"Thanks to these ordinances, there is now greater transparency, predictability and legal certainty in efforts to tackle the problem of illicitly acquired assets," the Swiss Cabinet said.
A Foreign Ministry spokesman said the government had blocked about US$650 million (S$895 million) in the case of Egypt, 60 million Swiss francs (S$83 million) in the case of Tunisia and about US$70 million regarding Ukraine.
The Tunisian assets are set to remain frozen until Jan 18, and the others, until February.
The government will review next year whether to extend the asset freezes. If it does not, the freezes expire and the holders of the money regain control of their assets.
Switzerland has tightened money-laundering laws in recent years and requires financial institutions to enforce "know your customer" rules. These also cover "politically exposed persons" encompassing leaders, ministers and military brass.
Over the past 15 years, it has returned nearly 1.8 billion Swiss francs' worth of assets, more than any other financial centre, the Swiss government said.