Ousted Egyptian President Mohamed Hosni Mubarak - File photo Ousted Egyptian President Mohamed Hosni Mubarak - File photo

Switzerland lifts assets-freeze on ousted Mubarak

Wed, Dec. 20, 2017
BERN, Switzerland - 20 December 2017: The Federal Council in Switzerland has decided to lift the assets-freeze on ousted Egyptian President Mohamed Hosni Mubarak. It has also decided to renew the freeze on the assets of Tunisian President Ben Ali among others.

The Federal Council's official statement is as follows:

At its meeting on December 20, 2017, the Federal Council decided to extend for one year the freeze on the assets of ousted Presidents Ben Ali (Tunisia) and Yanukovych (Ukraine) and their entourages.

The purpose of this decision is to support the judicial cooperation between Switzerland and these two states. Taking note of the recent closing of the mutual legal assistance procedures between Switzerland and Egypt, the Federal Council decided to lift with immediate effect the freeze on assets in the context of this country.

At the beginning of 2011, the Federal Council reacted immediately to the uprisings taking place at the time in a number of Arab countries by ordering, as a preventive measure, a freeze on the assets in Switzerland of ousted Presidents Ben Ali and Mubarak and of politically exposed persons among their entourages. It subsequently announced a similar freeze in the context of the crisis in Ukraine in February 2014.

The Federal Act on the Freezing and the Restitution of Illicit Assets held by Foreign Politically Exposed Persons (FIAA), which came into force on July 1, 2016, governs the duration of freezes and annual extensions to them. An extension is possible if cooperation within the framework of mutual legal assistance bears fruit.

The freezes on the Tunisian assets (CHF 56 million) and the Ukrainian assets (CHF 70 million), which were extended by one year on the basis of a Federal Council decision on December 9, 2016, expire in January and February 2018 respectively. During the years since these freezes entered into force, several proceedings have been initiated against the main individuals concerned, and the authorities of these countries have taken steps to advance these cases at the judicial level.

Court rulings are, however, still required to determine whether or not the origins of the frozen assets are illicit; settlement agreements sanctioned by the judicial authorities of these countries can constitute an alternative solution. The Federal Council's decision to extend the freeze on the assets is warranted because this objective has not yet been fully met while the legal conditions for its extension remain valid. This one-year extension is expected to yield tangible progress in pending proceedings and increase the likelihood of the assets being returned to the country of origin.

In the Egyptian context, the freeze dates back to 2011 and covers an initial amount of approximately CHF 700 million. In keeping with the preventive nature of the measure, however, the fact of being listed in the ordinance on frozen assets does not necessarily mean that the persons concerned hold assets in Switzerland. In particular, this was not the case with former president Hosni Mubarak.

Since 2011, the amount of Egyptian assets frozen in Switzerland has been progressively reduced to about CHF 430 million following the delisting of names from the ordinance at the request of the Egyptian authorities, who have in the meantime concluded reconciliation agreements in Egypt. Together with several acquittals and classification decisions, these agreements contributed to the decision of the Egyptian judiciary to drop criminal proceedings in the most prominent cases with possible links to assets frozen in Switzerland.

For this reason and in the absence of tangible results, at the end of August 2017 the Swiss judicial authorities closed the mutual legal assistance procedures on cases with potential links to assets frozen in Switzerland. After almost seven years since the freeze was imposed in 2011 and despite the joint efforts undertaken, the cooperation between the two countries has failed to produce the anticipated results. With the closure of the mutual legal assistance procedures, realistic prospects of the restitution of the assets no longer exist within the framework of mutual legal assistance.

The freeze on the Egyptian assets on the basis of the FIAA therefore has no further purpose as defined by law and in jurisprudence, which the Federal Council noted when lifting it with immediate effect. This decision, however, will not result in the release of these assets (approx. CHF 430 million). They remain sequestered within the framework of criminal proceedings in Switzerland being conducted by the Office of the Attorney General of Switzerland for the purpose of determining whether or not their origin is licit.

Department responsible:

Federal Department of Foreign Affairs FDFA

Switzerland was the first country to react to the wave of popular revolts that washed over the Middle East early 2011 and immediately decided to administratively freeze the assets of Mubarak regime members that could be found in Switzerland. The freeze had been renewed in 2016 due to pending MLA proceedings.

The extension of an administrative freezing order based on the currently applicable law (Foreign Illicit Assets Act, FIAA) is only possible if, within the framework of Mutual Legal Assistance (MLA) proceedings, there is a functioning cooperation between Switzerland and the country of origin of the assets. In August 2017, MLA proceedings were closed given that basic elements necessary to execute them were not fulfilled. The Egyptian authorities had the possibilities do complete their requests.

Hence, the legal requirements to extend the freeze are no longer fulfilled.

The FIAA provides for a possibility to confiscate assets that have been previously frozen in the framework of mutual assistance, when the latter is not possible because the judicial system of the requesting country has failed or because the procedural requirements guaranteed as basic human rights are not fulfilled. The decision to close the MLA proceedings in August 2017 was based on technical, legal conditions and not on a political assessment of the stability of the judicial Egyptian authorities. Indeed, Switzerland considers Egypt to be a functioning State. Egyptian State institutions, in particular the judiciary, do function and are operational, as proven by the verdicts rendered including several acquittals of members of the Mubarak regime.

The assets in Switzerland have been blocked on the basis of three measures. While the freeze on the basis of the MLA proceedings has been lifted in August, the administrative freeze based on the FIAA has been lifted today. Nevertheless, the assets remain seized by within the framework of the criminal proceedings conducted in Switzerland by the Office of the Attorney General of Switzerland. The Swiss criminal investigation into suspicions of supporting and/or participating in a criminal organization and money laundering is still ongoing against six persons.
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