As a neutral country, Switzerland represents U.S. interests in Iran. It is not a member of the European Union, which recalled ambassadors from Iran earlier this week following the court ruling.
A Swiss foreign ministry statement said it would decide at a later stage whether to order the Swiss ambassador to Iran to stay in Switzerland or to return to Iran. The ambassador, Rudolf Weiersmueller, is currently in the U.S. for talks on representing Washington's interests in the Islamic Republic.
The foreign ministry said it would recommend the cancellation of a business seminar on trade in Iran, originally scheduled for early May in Switzerland.
It said it had stopped an internal study on whether to open up regular human rights talks with Tehran 'because the framework for a constructive human rights dialogue can not be fulfilled.'
Switzerland is no stranger to political assassinations of Iranian opponents.
A senior member of the Baghdad-based Mujahedeen Khalq, Kazem Rajavi, was killed near Geneva in April 1990.
Swiss authorities accused two Iranian agents, Mohsen Sharif Esfahani and Ahmad Taheri, of carrying out the killing. They were subsequently arrested in Paris.
However, France secretly extradited the pair to Iran in 1994 before they could be bought to face trial in Switzerland. The Swiss were furious.