Over CHF 130 million from entourage of former Ukrainian President Yanukovych targeted in confiscation proceedings
Bern, 15.02.2023 - At its meeting on 15 February 2023, the Federal Council decided to launch administrative proceedings to confiscate assets frozen in Switzerland following the Ukrainian revolution in February 2014. The confiscation proceedings in Switzerland will apply to all the assets liable to confiscation – in total over CHF 130 million. In taking this action, Switzerland is supporting Ukraine. Today's decision is entirely unrelated to the sanctions against Russia adopted in 2022.
The Federal Council has instructed the Federal Department of Finance (FDF) to initiate a number of confiscation proceedings with the Federal Administrative Court (FAC).The object of the proceedings is to confiscate assets of politically exposed persons (PEPs) and their close associates that are presumed to be of illicit origin. The people involved were linked to former president Viktor Yanukovych, who was deposed in February 2014 during the Ukrainian revolution.
Shortly after the beginning of Russia’s military aggression against Ukraine in 2022, the Federal Council started to consider cases where confiscation proceedings could be initiated under the Foreign Illicit Assets Act (FIAA). On 25 May 2022, it instructed the FDF to commence the first proceedings for the confiscation of roughly CHF 100 million. Following further deliberations, the Federal Council instructed the FDF to instigate proceedings in respect of a further CHF 30 million, bringing the total assets liable to confiscation to over CHF 130 million.
The assets will remain frozen pending a final decision by the administrative justice system in Switzerland regarding confiscation. Any assets that are ultimately confiscated will be returned to the Ukrainian people under an international agreement.
The procedure for confiscating assets is set out in the FIAA, which only applies in exceptional circumstances. The Act authorises the Swiss administrative justice system (the FAC and, if the decision is appealed, the Federal Supreme Court) to confiscate the assets of PEPs, but only under strict conditions. In particular, it is necessary that the judicial system of the foreign state has attempted to confiscate the assets, but has been unable to do so.
Freezing of assets by the Federal Council in February 2014 and legal proceedings
A few days after the ousting of Viktor Yanukovych in 2014, the Federal Council ordered the freezing of any assets in Switzerland of the deposed Ukrainian president and his entourage. In the months that followed, Ukraine initiated criminal proceedings to confiscate these frozen assets in Switzerland, filing several letters of request for mutual assistance with the Swiss authorities. Switzerland has since provided Ukraine with numerous documents and other evidence.
Despite this cooperation, since the initiation of the criminal proceedings the Ukrainian authorities have encountered certain difficulties in their efforts to confiscate the assets deposited in Switzerland. To date, they have not been able to issue judgments ordering their confiscation. Russia's military aggression against Ukraine, launched in 2022, has severely compounded these difficulties. In view of the above, the Federal Council considers that the launching of confiscation proceedings based on the FIAA is now both possible and appropriate.
The commencement of confiscation proceedings has obviated the need for the asset freeze ordered by the Federal Council in 2014. The Ordinance on the freezing of assets in connection with Ukraine will thus expire at midnight on 27 February 2023.
Distinction from the sanctions imposed against Russia
Today’s decision by the Federal Council is entirely unrelated to the sanctions against Russia adopted since February 2022, which include sanctions consisting of asset freezes against various Russian nationals and entities. These sanctions were imposed under the Embargo Act with the sole purpose of exerting political pressure on Russia to bring it into compliance with international law.
This is not comparable to the situation regarding the assets of the entourage of former Ukrainian President Yanukovych. The latter assets have been frozen since 2014. They were the subject of criminal proceedings in Ukraine and mutual assistance procedures initiated by Ukraine. The confiscation claims, which the FDF will bring and which involve a total of more than CHF 130 million, will be based on the FIAA. The purpose of the proceedings is to determine in the specific circumstances concerned whether the assets are of illicit origin and can therefore be confiscated.
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