Switzerland loves to lay claim to one of the best laws against money laundering and the acceptance of assets stolen by dictators. The facts often do not square with this claim. Since the Arab Spring, ever more money has been surfacing, belonging to deposed dictators or their entourage. In 2011, the report by the Money Laundering Reporting Office Switzerland (MROS) revealed that the year 2010 saw no registrations at all for Egypt or Tunisia. In other words, the system had not worked.
Resolute approach to suspect assets
In September 2013, Alliance Sud took part in the expert consultation on the new law on potentate funds. It welcomed the draft law but still called for decisive improvements. Among other things, it called for suspect assets to be blocked not only in the event of regime change but at any time. Alliance Sud was also critical of the excessively onerous requirements for information to be transmitted to the country where the stolen assets originated.
A law made toothless
On 10 June 2015 the National Council debated an improved draft of the law on potentate funds. But the House approved several amendments in an attempt to water down the law.
Alliance Sud deplored the National Council's call for the introduction of a shorter period of limitation for offences against property committed by dictators. The procedure for blocking, investigating and returning dictators' ill-gotten assets generally takes between 10 and 20 years. The limitation period suggested by the National Council would in many cases have meant interrupting ongoing investigations and returning the funds to dictators and their clans.
The National Council furthermore wanted the law on potentate funds to apply only to people who have made an identifiable contribution to these assets – and this would have meant drastically restricting even current practice.
Council of States as counterweight
On 24 September the Council of States clearly opposed the National Council's proposals. After a procedure for the resolution of differences, both Houses on 18 December 2015 approved a law which, despite some shortcomings, does facilitate the blocking of stolen assets and their restitution to the people who have been robbed. This has made Switzerland considerably less attractive to corrupt foreign rulers wishing to conceal their assets.
It is worth noting that assets embezzled by dictators account for just a small part of all illicit financial outflows from developing countries each year. Much more significant are financial flows that serve companies and private persons for tax evasion purposes. There is a dearth of effective measures in this regard. According to a study recently published by the NGO Global Financial Integrity, emerging and developing countries lost some US$7.8 billion through such illicit financial flows between 2004 and 2013.