Switzerland is unfreezing roughly 3 million euros ($4 million) held in a Geneva bank by a cousin of Syrian President Bashar al-Assad, according to a court ruling.
The money, held by Hafez Makhlouf, head of a branch of Syrian state security, was frozen in April when he was trying to conclude a property deal in Syria .
However, it was then unfrozen in September after he appealed in absentia because it predated sanctions imposed by the Swiss in May over the Syrian government's crackdown on the uprising against the president, according to the Swiss court ruling.
This latest ruling, made public after a hearing in January, rejects a last-ditch effort by Swiss prosecutors to keep the funds frozen on grounds of suspected money-laundering.
The Swiss government declined to comment.
Makhlouf is a powerful figure in Assad's inner circle. He is also the brother of billionaire businessman Rami Makhlouf, who was a target of protesters in the early days of the uprising because of allegations of corruption, which he denies.
He was not named in the court ruling, but identified by his title and his relationship to Assad.
The prosecutor was ordered to pay Makhlouf 1,800 Swiss francs ($2,000) to cover his costs.
Switzerland expanded the sanctions against Syria in May to include Assad and other senior officials in an attempt to raise pressure on his government to end the crackdown on protesters.
It said in December it had frozen 50 million Swiss francs ($55 million) of funds belonging to Assad and other top officials.
Switzerland has worked hard in recent years to improve its image as a haven for ill-gotten gains, seizing the assets of numerous deposed dictators and agreeing in 2009 to soften strict bank secrecy to help other countries catch tax cheats.
It has blocked assets of the former Tunisian and Egyptian leaders and their entourages as well as those of late Libyan leader Muammar Gaddafi and his family.