At its meeting on May 25, 2022, the Federal Council decided to launch administrative confiscation proceedings for assets frozen in Switzerland following the Ukrainian revolution of February 2014. Switzerland is thus providing support to Ukraine, which is facing certain difficulties in its efforts to confiscate these assets. These difficulties have been compounded since the start of the war in Ukraine. Today’s decision is unrelated to the sanctions imposed against Russia in 2022.
The Federal Council has instructed the Federal Department of Finance to initiate confiscation proceedings before the Federal Administrative Court (FAC). The proceedings concern assets of Yuriy Ivanyushchenko and his family, amounting to over CHF 100 million. Yuriy Ivanyushchenko was a close associate of Ukraine’s former president, Viktor Yanukovych, who was deposed in February 2014 during the Ukrainian revolution.
The FAC will determine whether the conditions for confiscation are met. If, at the end of the legal proceedings, the assets are definitively confiscated, they will be returned to Ukraine.
The confiscation proceedings are based on the Foreign Illicit Assets Act (FIAA), which only applies in exceptional situations. It allows the confiscation of assets of foreign politically exposed persons (PEP), but 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 president and his entourage. In the months that followed, Ukraine initiated criminal proceedings to confiscate these frozen assets in Switzerland and filed 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 these assets deposited in Switzerland. To date, they have not been able to issue judgments ordering their confiscation. With the outbreak of war in Ukraine, these difficulties were severely compounded. In view of the above, the Federal Council considers that the launching of confiscation proceedings in Switzerland is now both possible and appropriate.
Distinction from the sanctions imposed against Russia in 2022
The sanctions imposed since the end of February 2022 against Russia include the freezing of assets of certain persons. These sanctions are based on the Embargo Act and are intended to exert political pressure on a state to comply with international law. This is not comparable to the situation regarding the assets of former Ukrainian President Viktor Yanukovych and his entourage. The latter assets have been frozen since 2014 on the basis of the FIAA. The purpose of the confiscation proceedings based on the FIAA is to determine in very specific cases whether the assets concerned are of illicit origin and whether they can thus be confiscated.