Switzerland is a constitutional state – you can’t just take people’s money away from them

Interview with National Councillor and FAC President Franz Grüter on the confiscation of Russian assets

mw. As is well known, the Federal Council has taken over all EU sanctions against Russia since 28 February 2022 – regardless of Switzerland’s sovereignty, rule of law and neutrality (see Current Concerns of 10 May 2022). One measure that is particularly questionable from the point of view of the rule of law is the adoption of a list from Brussels with more than 1,000 names of Russian individuals and companies whose assets were subsequently frozen – without them being given the opportunity to comment on it (right to be heard) or to take legal action against it, as guaranteed by the Federal Constitution (see box).
Today, the demands from abroad go a huge step further: the frozen Russian assets are to be confiscated by the Confederation and used for the reconstruction of Ukraine. National Councillor Franz Grüter, President of the Foreign Affairs Committee of the National Council (FAC-N), recently warned against this in the “Neue Zürcher Zeitung”: “We must not suddenly abandon our principles of the rule of law”.¹

Current Concerns: National Councillor Grüter, can you explain that?
Franz Grüter: Yes, Switzerland is a constitutional state. Actually, everyone is proud of that, regardless of political orientation. Property is guaranteed in the Federal Constitution [Article 26]. If we now suddenly start arbitrarily expropriating people, then that is a breach of the Federal Constitution. It has to be said so clearly.

The guarantee of property is deeply rooted in the Swiss population

If we confiscate the frozen Russian assets, then that is unconstitutional. If you want that, you have to amend the constitution accordingly and have it approved by the people. But I must also tell you that Switzerland, as a constitutional state, will have a problem if we start expropriating people solely on the basis of their nationality. The demand is not new, it was already raised immediately after 24 February, especially by the Polish Prime Minister, who said, in essence: “You must take away the money of all Russians, across the board.” This would introduce a kind of clan liability. Someone would be arbitrarily expropriated simply on the basis of their nationality and not on the basis of a court ruling and a clean constitutional procedure. That definitely does not work. Once again, the guarantee of property is deeply anchored in the constitution and also in the Swiss population.

It should also be anchored in the USA and the EU, right?
I don’t know their constitutions in detail, but I am sure that the right to property and the guarantee of property are also enshrined in the constitutions of these states, so such an action would be illegal there too. And I very much hope that the rule of law will prevail in these countries as well.

The question is also whether the sanctioned Russians can legally defend themselves.
That is a good point. As far as I know, the sanctioned Russians in Switzerland have been denied legal assistance, they cannot even defend themselves through lawyers against the freezing of their assets. In my view, this is a very worrying state of affairs.

Switzerland must not give in to pressure from the USA and the EU

One must also consider the wider consequences. There are always sources of conflict in this world. If we now start with arbitrary expropriations, the Swiss constitutional state will become dilapidated. We must withstand this pressure.

According to a spokesperson for the Federal Office of Justice FOJ, the Federal Council has set up a working group with representatives of the departments involved to “examine what could be done with the frozen Russian funds in Switzerland”. Do you know more details?
The working group you mentioned is looking into the question of what to do with the blocked 7.5 billion of the sanctioned persons. Here, too, I can only say: We are a constitutional state, so we need court decisions. You can’t just take people’s money away. The fact that the assets are blocked is not unproblematic in itself. The question remains as to what will happen to these funds afterwards. There have already been cases in Switzerland where money has been seized from foreign dictators. However, this has been decided by the courts. And these are absolutely exceptional cases that must be very well justified from a legal point of view. Blanket expropriations are a completely different category.

As already mentioned, even individual persons who are on the sanctions list cannot today have it checked in Switzerland whether the blocking of their funds is legal.
Yes, that is the case. The case that became public in detail [in Die Weltwoche] is that of Andrei Melnichenko, a fertiliser entrepreneur who has been living in Switzerland for many years. He is being denied legal assistance. I am very surprised that something like this is happening. I think Switzerland has to be careful not to give in to the pressure that comes mainly from the US and the EU – by the way, Melnichenko is not sanctioned in the US, only in the EU. We must not simply make moralistic decisions. The people on the sanctions list must be allowed court cases, they must be able to take legal action against it.

We must return to genuine neutrality

Back in April, FDFA head Ignazio Cassis told SRF News that Switzerland’s action was “100 per cent compatible with the country’s neutrality”. How do you see that?
The perception of whether Switzerland is neutral or not is very different. The US, the American president, has said, “Switzerland is no longer neutral.” The headline of the “New York Times” at the end of February 2022 was: “Switzerland has abandoned neutrality.” Throughout the Western press, Switzerland was virtually celebrated for giving up its neutrality. When Ukraine asked Switzerland if it was ready to take on the protecting power mandate, in other words a postman function between Ukraine and Russia, so to speak, Russia said: not with Switzerland, because it is no longer neutral.
It is only the Federal Council that keeps saying we are neutral. But we are only neutral if we are recognised as neutral. We must therefore return to a genuine neutrality that is also recognised by the international community of states.

National Councillor Grüter, thank you very much for the interview. •

¹ Gafafer, Tobias. «Die Schweiz gerät wegen russischer Gelder unter Druck (Switzerland comes under pressure over Russian money)». In: Neue Zürcher Zeitung of 3 January 2023

Basic Rights in the Federal Constitution of the Swiss Confederation

Art. 26 Guarantee of ownership

The right to own property is guaranteed.
The compulsory purchase of property and any restriction on ownership that is equivalent to compulsory purchase shall be compensated in full.

Art. 29 General procedural guarantees

Every person has the right to equal and fair treatment in judicial and administrative proceedings and to have their case decided within a reasonable time.
Each party to a case has the right to be heard.

No expropriations for political expediency or diplomatic cowardice!

mw. Fortunately, there are also personalities in Swiss jurisprudence who insist on adherence to the principles of the rule of law as laid down in the Swiss Federal Constitution. One of them is Professor Dr Peter V. Kunz, Director of the Institute for Commercial Law at the University of Berne. In a recent newspaper commentary, he noted some important stakes of the Swiss rule of law and neutrality that our politicians have to respect vis-à-vis nationals of all states of the world. Peter V. Kunz complains that there is hardly any serious discussion of neutrality in the media and politics at the moment, although it has been “the real anchor of Swiss foreign policy for more than 200 years”. The fact that Switzerland is adopting the wording of almost all the EU sanctions goes far beyond a “solidarity action”. He is calling a spade a spade: “The sanction screws are to be tightened even further – at the request of the USA”, and he warns: “But be careful! We should not treat the fundamental right of the guarantee of property lightly, even if pressure from abroad increases in the future.” The author explains the big leap from blocking to confiscation of assets from the perspective of the rule of law: in an asset freeze, funds are only temporarily blocked, whereas in a confiscation, property is permanently seized by the state. Therefore, confiscation of assets “may only take place in legal proceedings, with concrete and provable criminal charges and not through ‘show trials on suspicion’. Those affected must be able to inspect files and defend themselves in court”. This result “from a Swiss tradition that can be summed up in one word: The rule of law”.
In clear words, the Bernese law professor rejects “expropriations without compensation for reasons of political expediency or diplomatic cowardice”, and not only “against Russians, whom we like to place under a cheap general suspicion since the Ukraine war”.

Unsuccessful attempt to interference on the part of the EU

Particularly noteworthy is an invitation to lunch in early December 2022 by the ambassador of the European Union to Switzerland, Petros Mavromichalis, of which Professor Kunz reports in the newspaper commentary: “He asked for an exchange of views on the Swiss sanctions against Russia because of the Ukraine war. This honourable invitation came as something of a surprise to me, since I hold neither an official nor an unofficial function for Switzerland.” The reason for this action becomes clearer when we learn that Peter V. Kunz had already criticised “the establishment of a Swiss task force (‘eyewash’) or the hunt for alleged oligarch money (‘banana republic’)” in several interviews in the spring of 2022, which brought him “sometimes fierce and mostly anonymous criticism”. This stalwart voice had to be “turned around” according to the will of the EU thugs − however, the shot backfired.
A bravo for the Bernese law professor! By making the attempt to influence public, he takes the sting out of the omnipresent manipulation of opinion by the major Western powers. His example can be an incentive for each of us to demand the freedom of opinion enshrined in international law and the Federal Constitution.

Source: “Konfiskation von russischen Vermögen: Wir dürfen Russen nicht unter billigen Generalverdacht stellen (Confiscation of Russian assets: We must not place Russians under cheap general suspicion)”.
Guest commentary by Peter V. Kunz. In: “Aargauer Zeitung” of 11 January 2023