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.

"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.

Its 1983 Federal Act on International Mutual Assistance in Criminal Matters was first used 25 years ago to freeze the assets of the Philippines' Ferdinand Marcos, ousted in a 1986 coup.

Another 1998 law required banks to ascertain the "beneficial owner" of accounts – that is, the man behind the lawyers. On the basis of those laws, the Swiss government recently froze accounts belonging to Egypt's Hosni Mubarak, Tunisia's Zine El Abidine Ben Ali, Ivory Coast's Laurent Gbagbo, and now Libya's Muammar Qaddafi.

And thanks to Switzerland's new Return of Illicit Assets Act, which took effect Feb. 1 and allows the Swiss government to determine the legality of funds of any person hailing from a "failing state," the account of Haiti's Jean-Claude "Baby Doc" Duvalier is now under investigation.

"This burden-shifting law is unique in the world of anticorruption legislation," says Mr. Vlasic, who was on the Duvalier/Haiti asset recovery team at the World Bank and now serves as international legal adviser to the Charles Taylor/Liberia asset recovery team.

Since Egypt is not a failed state, it must request within three years for the Swiss government to launch an investigation into the source of Mubarak's accounts. “This gives the Egyptian government sufficient time to launch an investigation,” says Mr. Thelesklaf of the Basel Institute on Governance.