"The Americans & Swiss Target The Kleptocrats" contains an article discussing the Swiss Restitution Of Illicit Assets Act ("RIAA"). This act could be passed next month by the Swiss Parliament. It would be used to freeze the proceeds of public corruption schemes which some dictators and other politically exposed persons might transfer from a foreign state into Swiss bank accounts.
Even if a foreign state fails to make a mutual legal assistance treaty request to forfeit any illicit assets owned by a politically exposed person, said assets could still be frozen pursuant to the act. As local Swiss counsel practicing in Zurich recently advised, "Basically the act provides that if, in the context of a failed state, the country in question can no longer make proper legal assistance requests, money seized in Switzerland from former rulers of that country can be returned anyway, if necessary by being given to some relief organisation."
The act’s sixth article creates a presumption that a politically exposed person possesses illicit assets based on the assertion that the same has sudden unexplained wealth and lives in a state believed to be corrupt:
Art. 6 Presumption of unlawful origin
The presumption that assets are of unlawful origin applies where
a. the wealth of the person who holds powers of disposal over the assets has been subject to an extraordinary increase that is connected with the exercise of a public office by the politically exposed person; and
b. the level of corruption in the country of origin or surrounding the politically exposed person in question during their term of office is or was acknowledged as high.
The presumption ceases to apply if it can be demonstrated that in all probability the assets were acquired by lawful means.The presumption is reversed if evidence of lawful acquisition of the assets is demonstrated with preponderant plausibility.
The act was proposed after Swiss authorities were forced to release assets which had belonged to former dictators such as Haiti’s Jean-Claude "Baby Doc" Duvalier andMobutu Sese Seko of Zaire, now known as the Democratic Republic of Congo. If passed, the act would supplement the existing laws below which can be asserted against dictators or other politically exposed persons suspected of hiding illicit assets in Switzerland.
- The Federal Law Pertaining to the Sharing of Confiscated Assets ("the Asset Sharing Act");
- The Swiss Federal Money Laundering Act, effective April 1, 1998;
- The Swiss Federal Constitution, which at Article 184 paragraph 3 provides for the Swiss government’s issuance of temporary ordinances and decrees to safeguard Swiss interests;
- The Swiss Penal Code which can be applied to cases involving a politically exposed person’s illicit assets, money laundering, corruption, etc.
- The Swiss Federal Act on International Mutual Assistance in Criminal Matters, effective January 1, 1983. Permits the grant of legal assistance to foreign states not party to the April 20, 1959 European Convention on Mutual Assistance in Criminal Matters and under other circumstances.
Note: The RIAA was passed by the Swiss Parliament of October 1, 2010, as mentioned by The New York Times.
Translated Copy Of RIAA: Courtesy Federal Dep’t Of Foreign Affairs
Copyright 2010 Fred L. Abrams
(Last edited October 20, 2010)