Switzerland implements EU's 11th package of sanctions on Russia, expanding existing restrictions and extending derogations

10 min read

Authored by our Global Sanctions, Export Controls and Customs Teams1

On the 16th of August, Switzerland adopted new measures against Russia, following the EU's 11th sanctions package. Switzerland extends the scope of existing sanctions, for example extending export bans to cover the transfer of IP rights and trade secrets, extending the transit ban to high-tech and aviation items, extending the import bans to third-country iron and steel with Russian-origin input and extending the asset freeze to another 12 individuals and 97 entities. Switzerland also adjusts the exemptions to existing sanctions, with extended wind-down provisions and derogations enabling certain divestments, and a new derogation for the conversion of certain depository receipts involving the NSD.

Export bans extended to IP rights, trade secrets and related services, and more goods

All Swiss export bans were expanded to cover:

  • The direct or indirect sale, licencing or transfer of intellectual property ("IP") rights or trade secrets; and
  • the granting of rights to access or re-use any material or information protected by means of IP rights or constituting trade secrets,"related to" the restricted goods and technology or the provision, manufacture, maintenance and use of those goods and technology to any person in Russia or for use in Russia.2,3 This will prohibit any new transfers of IP rights related to restricted industrial or luxury goods and technology, unless covered by a relevant derogation.4

In addition, the scope of products and services subject to export restrictions has been expanded:

  • The export ban on luxury goods now also covers related services (i.e. financing and financial assistance, technical assistance, brokering services or "other services").5
  • The list of industrial goods in Annex 23 now covers, amongst others:
    • corrugated paper products;
    • rubber conveyor belts;
    • new pneumatic tires of rubber, of a kind used for buses and lorries; and
    • machinery for working rubber or plastics.
  • Annexes 20 and 23 now also cover, with limited wind-down periods available, goods previously subject to the export ban on luxury goods such as:
    • motor cars and other vehicles designed principally for transport of persons and yachts (Annex 20); and
    • binoculars (Annex 23).
  • The list of high-tech goods in Annex 1 now covers, amongst others: (i) equipment for manufacture of Printed Circuit Boards (PCBs) and related components and materials; and (ii) various new products listed by tariff code and belonging to product categories such as electronic devices, modules and assemblies (e.g. radio navigational aid apparatus).7

In addition, 87 entities were added to the list of companies linked to military end-users, which are subject to tighter export restrictions in relation to restricted dual-use items and high-tech goods. Some of those newly listed military end-users are located outside Russia (e.g. Iran, Hong Kong, UAE).8

Expanded import bans to third-country iron and steel with Russian-origin input

A further amendment concerning the imports of iron and steel products processed in a third country that incorporate iron and steel products originating in Russia was introduced: importers of such products into Switzerland must provide evidence attesting to the origin of iron and steel inputs used for the processing of the product taking place in a third country.9

Extended bans on transit through Russia

Certain restricted high-tech goods,10 aviation/space industry goods,11 jet fuel and fuel additives12 that already could not be exported to Russia are also now subject to a ban on transit through Russian territory (in addition to the transit ban already in place for dual-use goods). Limited exemptions and derogations apply.13

Extended restrictions on trading securities

The ban on selling to Russian nationals, residents or entities any transferable securities denominated in Swiss francs or any official currency of a Member State issued after 12 April 2022 to Russian persons was expanded to securities in any other currency issued after 6 August 2023.14 The concept of securities also covers crypto assets. 

Additions to the Swiss asset freeze list

Switzerland has designated another 12 individuals and 87 entities on the asset freeze list in relation to Russia, focusing on exporting dual-use goods and goods that contribute to Russia's military and technological enhancement, IT companies holding licences issued by the FSB, propagandists and various government officials. 

New exemptions and derogations under export and import bans

For some of the newly listed goods under the Swiss export ban on industrial goods, there is a wind-down exemption until 17 November 2023, based on pre-existing contracts namely: (i) motor vehicles and yachts, if valued below CHF 50 000;15 (ii) specified products including rubber conveyor belts or new pneumatic tires for lorries);16 or (iii) goods that were moved from the export ban on luxury goods, such as binoculars.

A new derogation from the Swiss export ban on luxury goods covers sale or supply of and technical assistance, financing and financial assistance to specified vessels. It applies until 31 December 2023 for pre-existing contracts.17

An additional derogation was added to the Swiss export bans on high-tech and aviation goods for the sale, supply, transfer or export, directly or indirectly, of goods and technology, intended for the exclusive use and covered by maintenance obligations under a long-term lease agreement between Switzerland and Russia.18

There is a new derogation for a specific project:

  • Swiss export bans for dual-use, maritime navigation goods and technology and industrial for the Caspian Pipeline Consortium (CPC) for transport of crude and petroleum products from Kazakhstan which is loaded, departing or being transited through Russia. This derogation may also extend to the provision of certain specified professional services (e.g. engineering services).19

New derogations from Swiss ban on professional services

Swiss sanctions currently prohibit the provision of accounting, auditing, bookkeeping, tax consulting services, business and management consulting or public relations services, architectural and engineering services, non-contentious legal advisory services and IT consultancy services, directly or indirectly, to Russian entities and the Government of Russia.20

Other new derogations cover professional services strictly necessary for the removal of control by persons subject to the Swiss Asset Freeze over non-listed companies that are owned or controlled by the former ("firewall"),21 legal advisory services provided until 31 March 2024 that are legally required for the completion of a sale or transfer of proprietary rights owned by Russian companies in EEA or Swiss companies,22 and professional services until 31 March 2024 that are strictly necessary for the divestment from Russia or the wind-down of Russian business activities.23

Divestment-related derogations from import and export sanctions

Subject to certain conditions, national authorities can authorise the otherwise restricted sale, supply or transfer of restricted items (and IP rights) if strictly necessary for divestment and wind-down activities. This derogation will apply until 31 December 2023.24

The existing derogation under Swiss import bans remain unchanged and applies until 30 September 2023.25

A new derogation for divestment covers the sale, supply, transfer or export, directly or indirectly, of otherwise restricted oil and gas equipment if: (i) strictly necessary for the divestment from an joint-venture incorporated or constituted before 3 March 2022 under Swiss law or the law of a EEA Member State; (ii) involving a Russian company; and (iii) operating a gas pipeline infrastructure between Russia and third countries.26 The new derogation applies until 31 March 2024.

New derogations from the Swiss asset freeze

The Swiss also broadened the scope of specific existing derogations (subject to prior authorisation) from the Russia-related asset freeze restrictions. A number of these concern specific situations, such as:

  • the disposal or the transfer by 31 December 2023 by a Swiss or EU entity currently or previously controlled by VTB Bank of securities belonging to VTB Bank or the Russian National Settlement Depository (NSD), pursuant to operations, contracts or other agreements concluded with, or otherwise involving, VTB Bank and the Russian National Settlement Depository (NSD) before 3 June 2022;27
  • transactions, including sales, which are strictly necessary for the wind-down, by 31 August 2023, of a joint-venture or similar legal arrangement established in Russia with Alexey Mordashov (Chairman of Severstal and Severgroup) or an entity owned by him before 8 March 2022;28
  • the setting-up, certification or evaluation of a firewall that removes the control by a person subject to Swiss or EEA Asset Freeze over a non-designated Swiss or EEA entity29; and
  • the provision of pilot services to vessels in innocent passage for reasons of maritime safety.30

Further, a new derogation allows the Swiss authority (SECO) to authorise the conversion by 25 December 2023 by Swiss persons of certain depositary receipts with Russian underlying shares where the NSD acts as depository, for the purpose of selling the underlying security.31

No anti-circumvention framework yet

As part of its 11th sanctions package, the EU has created a legal basis for a new anti-circumvention framework enabling the prohibition of exports of specified sensitive dual-use and high-tech goods and technology2 to third countries that may in the future be identified by the Council as having "systematically and persistently failed to prevent" supplies of such goods from the EU to Russia "despite the EU's prior outreach and assistance to the country in question".32 The EU intends to use this tool as a measure of last resort. At present, the Swiss Federal Council decided not to adopt an equivalent framework but will consider doing so should the EU apply it in practice.33 

1 See here for previous White & Case client alerts relating to sanctions.
2 Relevant provisions of the Ordinance are revised: new Article 2a(3bis) (military equipment); new Article 4(2bis) (dual use); new Article 5(2bis) (goods intended for military and technological reinforcement or for the development of the defence and security sector); new Article 9(5bis) (goods used in aviation or the space industry); new Article 9a(2bis) (maritime and navigating goods); new Article 9b(2bis) (jet fuel and fuel additives); new Article 10(2bis) (goods for oil refining and liquefaction of natural gas); new Article 11(2bis) (energy sector goods); new Article 11a(2bis) (goods to strengthen the industry); new Article 14b(1ter) (luxury goods). 
3 The following provisions also apply to the provision, manufacture, maintenance and use of those goods and technology to any person in Ukraine or for use in Ukraine: new Article 2a(3bis) (military equipment); new Article 4(2bis) (dual use); new Article 5(2bis) (goods intended for military and technological reinforcement or for the development of the defence and security sector); new Article 9a(2bis) (maritime and navigating goods); new Article 9b(2bis) (jet fuel and fuel additives).
4 The exemptions vary according to the provision under which the relevant goods are covered.
5 New Article 14b(1bis) of the Ordinance.
6 Annex 20 and Annex 23 of the Ordinance.
7 Revised Annex 1 of the Ordinance.
8 Revised Annex 8 of the Ordinance.
9 New Article 14a(4bis) of the Ordinance.
10 Good and technology which might contribute to Russia's military and technological enhancement or to the development of its defence and security sector; Article 5(1bis) of the Ordinance.
11 New Article 9(1bis) of the Ordinance.
12 New Article 9b(1bis) of the Ordinance.
13 New Article 30a(2bis) of the Ordinance; new Article 30d of the Ordinance.
14 Revised Article 23(1) of the Ordinance.
15 Revised Article 35(10)(a) and Annex 17 of the Ordinance.
16 Revised Article 35(10)(b) and Annex 17 of the Ordinance.
17 New Article 14b(4) of the Ordinance.
18 New Article 6(2)(i) of the Ordinance.
19 New Article 30d of the Ordinance. 
20 Article 28e of the Ordinance.
21 Article 24a(2)(d) of the Ordinance.
22 Article 30c(3) of the Ordinance.
23 Article 30c(1) of the Ordinance.
24 Article 30a of the Ordinance. 
25 Article 30a(3) of the Ordinance.
26 New Article 30a(2bis) of the Ordinance.
27 Article 15(8ter) of the Ordinance.
28 Article 15(9septies) of the Ordinance.
29 New Article 15(10) of the Ordinance.
30 New Article 15(3)(c) of the Ordinance.
31 New Article 15 8quater of the Ordinance.
32 New Article 12f and Annex XXIII of Regulation 833/2014, as added by Regulation 2023/1214.
33 Press release of the Federal Council – Ukraine : Switzerland implements 11th package of sanctions (16.08.2023).

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