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By Stephanie Nebehay
BERNE, Aug 24 (Reuters) - Switzerland expects to adopt a new law by the end of the year that will speed restitution of illicit funds stashed in the Alpine country, where thousands of 'politically exposed persons' are believed to hold bank accounts, a top Swiss official said on Monday.
Swiss authorities are cooperating with a number of countries, among them Haiti, Egypt, Tunisia and Ukraine, to return stolen assets that have been frozen following changes in power, said Valentin Zellweger, head of the foreign ministry's federal department of international law.
Specifically, they are working to return $40 million to Tunisia, a "big slice" of the $60 million stashed during the era of former leader Zine al-Abidine Ben Ali, he said.
But the killing of Egypt's general prosecutor has slowed cooperation with Cairo on returning funds linked to former President Hosni Mubarak, he said.
The two houses of the Swiss parliament still need to reconcile their versions of the new draft law, including the issue of a statute of limitations, Zellweger said.
"I guess that we will only have the statute by the end of the year," he said. "It will be the most comprehensive act worldwide ... it is the right thing to do."
In the last 25 years, Switzerland has returned $1.8 billion in stolen or embezzled funds seized in accounts held by dictators ranging from the Philippines' Ferdinand Marcos and Nigeria's Sani Abacha to Haiti's Jean-Claude 'Baby Doc' Duvalier and Sese Seko Mobuto of the former Zaire.
In the latest cases, Swiss authorities have agreed to a U.S. request to freeze funds with suspected links to Gulnara Karimova, daughter of Uzbekistan President Islam Karimov, a Swiss justice office spokesman said.
Karimova had been Uzbekistan's ambassador to the U.N. in Geneva and there were questions of immunity, Zellweger said, adding: "The Swiss authorities are one of the first to freeze."
The Swiss Office of the Attorney General has also opened a criminal proceeding against two executives and unknown persons from Malaysia's troubled state investment fund for suspected corruption and money laundering.
Switzerland is the world's largest offshore wealth centre, with $2.4 trillion in assets in 2014, according to the Boston Consulting Group.
Asked about Swiss banks and authorities doing proper due diligence to identify dubious funds, Zellweger said, "I certainly would not tell you we have failed on prevention, but obviously we have to get better.
"Prevention starts with the banks. We have to work with the banks to sensitise them even more to the danger of accepting such funds," he said. "The most important thing is we have the legal framework in place."
"We are the biggest private offshore banking centre in the world. I don't think we are worse than the others.
"Our aim is to minimise the accidents. Asset recovery is part of the attempts of the government to minimise accidents." (Reporting by Stephanie Nebehay, editing by Larry King)