‘Switzerland has the legal basis to use frozen Russian money for Ukraine’

Can Switzerland use the seized assets of Russian oligarchs to fund the reconstruction of Ukraine? Yes, writes lawyer and anti-corruption expert Mark Pieth, referring to an article of the criminal code that targets organised crime.

Last month, Foreign Minister Ignazio Cassis shocked the Swiss banking world by declaring that Switzerland could permanently confiscate assets seized from Russian oligarchs and hand them over to Ukraine to fund reconstruction.

Since then, the Swiss media have been discussing legal options and have largely reached the conclusion that confiscation is inadmissible because it violates the constitutional guarantee of the right to own property.

This overlooks a very radical instrument enshrined in the criminal code since 1994. According to Article 72, “all assets that are subject to the power of disposal of a criminal or terrorist organisation” can be permanently confiscated. The reversal of the burden of proof in the second sentence is interesting: “In the case of assets belonging to a person who participates in or supports such an organisation (Art. 260), it is presumed that the assets are subject to the power of disposal of the organisation until the contrary is proven.” The forfeiture rule, without question, does not violate the property guarantee.

This special rule was primarily created to target mafia money. However, we forget that the Federal Court used it in 2005 to confiscate funds stolen from Nigeria by its former head of state, Sani Abacha. He was accused of creating a criminal organisation, together with his followers, to loot the country. His descendants were unable to prove the funds were legally acquired, so a large part of the money was confiscated and returned to the Nigerian people.

Under Swiss law, it is possible to give confiscated funds to the people who were harmed by the crime. If this is not possible — or not desired by the victims — the confiscated assets remain in the Swiss state coffers. Switzerland is free to dispose of them as it wishes — it can therefore use the money to rebuild Ukraine.

With regard to Russia, a state that launches a war of aggression and thereby violates international law can be accused of being a “rogue state”. However, under international law, even a state that acts criminally probably enjoys sovereign immunity. But the point of the Abacha case was that he had set up a criminal regime. It is conceivable that Vladimir Putin and his inner circle could be classified as a criminal organisation. Oligarchs who feed the war chest would be accomplices, much like mafia henchmen.

Note that Article 72 of the criminal code does not leave forfeiture to the discretion of the judiciary. It clearly states that “the court shall order”. Article 72 is subject to the principle of legality.

Of course, individual cases require further examination, especially whether oligarchs are actually willing to support the war, and whether their assets are at the disposal of the unjust regime.

However, concern about the negative consequences for Swiss banks should not lead us to lightly dismiss Article 72 of the criminal code.

The views expressed in this article are solely those of the author, and do not necessarily reflect the views of SWI swissinfo.ch.

This article was originally published in German, translated by Catherine Hickley.