A government order issued last evening blocked the assets of Gaddafi and 28 other members of his clan, including his wife Safia al-Barrasi, his sons and his only daughter Aisha as well as several relatives and leaders.
"In view of the developments, the Federal Council has decided to block with immediate effect any possible assets of Muammer Gaddafi and his entourage in Switzerland," the Swiss foreign ministry said in a statement.
In the past weeks, the Swiss government had frozen the assets of the ousted Tunisian President Ben Ali and Egyptian President Hosni Mubarek, but only after they were swept out of office by the popular uprisings against their regimes.
The Swiss government has been following with great concern the use of force against anti-government demonstrators by Gaddafi`s regime and the civil war-like situation, which in the last few days claimed hundreds of lives and caused injuries to numerous other people, the statement said.
The government condemns in sharpest terms the Libyan regime`s use of force against the country`s population to suppress their demands for a democratic change, it said.
The statement said freezing of the Libyan assets is a precautionary measure to protect them from the "risk of misappropriation" by the regime.
The government`s decision bans with immediate effect the sale or any kind of transfer of Gaddafi assets, including properties, for a period of three years.
Media reports said huge assets of the Gaddafi clans are not expected in Switzerland because billions of dollars of Libyan funds deposited in the Swiss banks were already transferred in the wake of a diplomatic crisis between the two countries following the arrest of Gaddafi`s son Hannibal in Geneva in July 2008.
According to the estimates of the Swiss National Bank, Libyan deposits in the Swiss banks shrank from 5.7 billion francs to 630 million francs as a result of the transfer. It is still unclear how much wealth belongs to the Gaddafi clan, the reports said.