Sanctions by Swiss federal Department of Economic Affairs, and Freezing and Restitution of Illicit Assets held by Foreign Politically Exposed Persons by the Department of Justice and Department of Foreign affairs
Switzerland’s Dual-Track Response to Illicit Wealth and Sanctioned States Switzerland manages sanctions and illicit-asset recovery through two distinct legal channels, reflecting its layered federal architecture. Trade and financial sanctions against foreign states, entities and individuals — implementing UN, OSCE or partner-country measures — fall under the Embargo Act (LEmb), enforced by SECO within the Department of Economic Affairs, Education and Research. These sanctions freeze funds and economic resources of listed persons and restrict trade in goods, services and capital. A separate instrument, the 2015 Act on the Freezing and Restitution of Illicit Assets of Foreign Politically Exposed Persons (LVP), addresses a narrower but politically sensitive problem: assets held in Switzerland by former foreign heads of state or senior officials suspected of corruption, typically after they lose power in a political upheaval. Here, the Federal Department of Foreign Affairs orders the initial freeze — often within days of a regime change, as with Tunisia’s Ben Ali, Egypt’s Mubarak and Ukraine’s Yanukovych — to preserve assets while the foreign state pursues mutual legal assistance proceedings. If that state’s judicial system is too weakened to complete the process, the Federal Department of Finance can petition the Federal Administrative Court for outright confiscation, relying on a legal presumption that unexplained, disproportionate wealth accumulated during a corrupt regime is of illicit origin. Recovered funds are channelled back not to the state’s treasury directly, but into public-interest programmes benefiting the population, with FDFA supervision. The distinction matters: sanctions under LEmb are a foreign-policy and trade-control tool tied to international coordination, while the LVP mechanism is a targeted anti-corruption and asset-recovery procedure specific to Swiss financial-centre integrity, sitting at the intersection of foreign policy, criminal law and international assistance.