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Swiss freeze Qaddafi assets: How dictators stash their cash 101

Switzerland froze the assets of Libya strongman Muammar Qaddafi and 26 other people from his entourage, less than two weeks after freezing assets belonging to Egypt's Hosni Mubarak.

By Staff writer / February 25, 2011

Libya's leader Muammar Qaddafi speaks on national television from Tripoli in this Feb. 22, still image taken from video footage.

Libyan State Television/Reuters

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Switzerland on Thursday announced it was freezing any assets in its banks belonging to Libyan leader Muammar Qaddafi, yet another blow to the embattled strongman who faces increasing pressure to step down.

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"In view of the developments, the Federal Council has decided with immediate effect to block any assets in Switzerland of Moammar Qaddafi and those who are closely associated to him. In this way, the Federal Council wishes to avoid any risk of embezzlement of any assets belonging to the Libyan state still held in Switzerland," the Swiss Federal Department of Foreign Affairs said in a statement.

Switzerland condemned Colonel Qaddafi's use of violence, including reportedly sending mercenaries against the protesters, and expressed condolences to the victims' families. The Swiss three-year freeze took affect immediately.

Of course, Switzerland's action also highlighted that Swiss banks often seem to make news for holding suspect assets, which begs the question: Is the government doing anything about that?

Despite its reputation for banking secrecy – and precisely because the government has tried to challenge its stereotype as a financial refuge for ex-dictators and war criminals – Switzerland has among the most progressive anti-money-laundering laws. Indeed, Swiss law is today a model for other nations.

“Switzerland is a trailblazer here and other countries are thinking how they can join in,” says Daniel Thelesklaf, who heads the Swiss-based International Center for Asset Recovery.

“Switzerland is one of the most forward-leaning countries in the world of asset recovery,” agrees Mark Vlasic, a Georgetown University law professor and partner at Ward & Ward PLLC, who served as head of operations of the World Bank's Stolen Asset Recovery Initiative.

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