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SBA statement on the draft legislation concerning the freezing and restitution of illicitly acquired assets of politically exposed persons

  • The SBA has called for legislation to regulate how dictators' assets should be handled, in order to establish legal certainty following the events surrounding the Arab Spring. The SBA therefore acknowledges that a draft legislation will enhance the reputation of the financial centre.
  • The SBA welcomes in particular the fact that in general, there will be international coordination with other countries and organisations concerning asset-freezing measures. This should ensure that Switzerland is not put at a competitive disadvantage compared with other financial centres due to unilateral, uncoordinated anticipatory political decisions.
The draft legislation proposed by the Federal Council does not fully take into account the concerns of banks or bank clients, however:

 

  • One constitutionally sensitive issue is that the draft legislation provides for the transfer of information to the country of origin prior to a request for legal assistance. This is intended to enable the foreign state to request legal assistance from Switzerland. The prior transfer of banking data, in particular, in the sense of spontaneous legal assistance is only acceptable provided there is an assurance that the information will be used in proceedings governed by the rule of law and that there is no risk of such information being passed on illicitly to third parties. If proceedings governed by the rule of law cannot be guaranteed, bank clients in particular will be faced with a threat to their physical and financial integrity.
  • Furthermore, the draft legislation does not include precise regulations governing the responsibilities of the authorities involved (Seco, MROS, FDFA - Directorate of International Law). There are still various different responsible bodies, meaning that there is a risk of creating contradictory instructions. The Bankers Association supports a “single window approach”, as this would considerably increase legal certainty as a fundamental concept of the new legislation.