EIPR comments on new Swiss law to freeze, seize and recover smuggled assets

The Egyptian Initiative for Personal Rights (EIPR) first commented last May on new laws being considered in Switzerland to freeze and retrieve assets deposited by foreign dictators into Swiss banks.

EIPR, as part of its work on issues related to the recovery of smuggled funds, obtained an Arabic translation of the new law, saying that it included discussion on all issues related to the freezing, seizure and recovery of assets deposited by foreign dictators. The Swiss Parliament is expected to discuss and rule on the law next month.

Osama Diab, a researcher for EIPR said about the law that, “this law could help facilitate the recovery of lost funds if applied to Egypt, particularly article 15 of the law which calls for reverse burden of proof. This article imposes the opposite of traditional notions which claim that ‘the accused is innocent until proven guilty’. According to the law, the accused is viewed as guilty, with the burden of proof placed on him to provide convincing evidence that deposited funds were obtained through legal means.”

Although this law was considered a positive step that increases the number of restrictions placed on smuggled funds, which may help Egypt regain some of its lost assets, the EIPR stated that it felt there did not exist an appropriate space within which to develop the law, saying that five of the law’s 31 articles would be problematic in this regard. They added that the process of freezing and retrieving funds would be difficult within Egypt due to domestic legal constraints.

Valentin Zellweger, Head of the Swiss Directorate of Public International Law, stated in a letter sent to the EIPR, that the Swiss and Egyptian governments should continue to cooperate with each other and exchange legal aid in order to prove the illegal nature of frozen assets, in addition to collecting information regarding the source of such funds. He emphasised the need to avoid speculation regarding the new law, which will not be operational before 2015. Any procedures to impose the law today onto frozen assets would take years to implement. Even in the event that sources of funds were proven to be corrupt, they would not be returned to Egypt until 2017 or 2018.

Following the Public Prosecutor controversy which occurred in Egypt last November, the Federal Supreme Court of Switzerland ruled to stop cooperating with Egyptian authorities due to the executive branch having intervened in the affairs of the judicial branch. Cooperation between Egypt and Switzerland in working to retrieve smuggled funds belonging to the former have since ceased.

EIPR expressed its hope that the Swiss Parliament and other governmental authorities would work to apply the law onto funds being smuggled out of Egypt.

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