Switzerland implements the remaining measures set out in the EU’s 8th sanction package

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Authored by our Global Sanctions Team

Switzerland has expanded existing sanctions and implemented new measures in response to the ongoing conflict in Ukraine. The latest modification of the Ordinance on Measures Connected with the Situation in Ukraine (the "Ordinance"1) entered into force at 18:00 CET on 23 November 2022 and has implemented the remaining measures of EU's eighth sanction package. In this note, we summarize the new sanctions and amendments to the Ordinance.

Prohibition on maritime transport to third countries of crude oil and petroleum products from Russia, subject to price cap

Switzerland had already introduced a ban on the direct or indirect purchase, import or transfer into Switzerland of crude oil or petroleum products originating in Russia or exported from Russia.

Switzerland has now extended the ban of oil and petroleum products to the maritime transport (and related technical assistance, brokering services, financing or financial assistance to such maritime transport) to third countries of crude oil (as of 5 December 2022) or petroleum products (as of 5 February 2023) which originate in or are exported from Russia2. These restrictions do not apply if the respective crude oil or petroleum products are purchased at or below a pre-established price cap. The price cap has not been set yet3.

There are also new exemptions (not requiring any authorization) that apply to the restrictions relating to the import and transport of Russian crude oil and petroleum products. For example, the transport of crude oil and petroleum products transiting through Russia are exempted, provided that the owner of the products is non-Russian4. Switzerland can also grant a wider exemption for the transport (or related services) of certain crude oil and petroleum products to third countries5. On this basis, Switzerland has exempted the transport by vessels to Japan of certain crude oil products falling under CN 2709 00 commingled with condensate, originating in the Sakhalin-2 Project in Russia from 5 December 2022 to 5 June 2023.6

Ban on architectural and engineering, non-contentious legal advisory, and IT consulting services to Russian companies and the Russian Government; Ban on serving on boards of listed Russian SOEs

Already, accounting, auditing, bookkeeping, tax consulting services, business and management consulting or public relations services may not be provided, directly or indirectly, to Russian entities and the Government of Russia. This is now extended to architectural and engineering services, non-contentious legal advisory services and IT consultancy services.7

Services provided for the exclusive use of Russian entities that are owned or controlled exclusively or jointly by entities incorporated in the EEA, Switzerland, or the UK are exempted from this ban. Services that are necessary to guarantee access to justice, including administrative and arbitral proceedings, in Switzerland, the EEA or the United Kingdom are also exempted from the ban. Services that are required for health emergencies, for the prevention or mitigation on an emergency basis of an event that may have serious and significant effects on human health and safety or the environment, or in response to natural disasters are also exempted. Moreover, services required for software updates for non-military purposes and for a non-military end user are also exempted.8

Derogations (subject to prior authorization) also exist for services that are necessary for humanitarian purposes, civil society activities that promote democracy, human rights or the rule of law in Russia, the functioning of certain diplomatic and consular representation of Switzerland, its partner countries and NGOs in Russia, and ensuring critical energy supplies and infrastructure.9

More products subject to import ban: iron and steel products, jet fuel and goods generating significant revenue for Russia

The current import ban on iron and steel is extended to all products classified under the Swiss tariff positions as "iron and non-alloy steel" (tariff positions 7206 to 7217), "stainless steel" (tariff positions 7218 to 7223), "other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel" (tariff positions 7224 to 7229) and "articles of cast iron or steel" (tariff position 73)10.

The current import ban on jet fuels and goods generating significant revenue for Russia has been expanded. Restricted products include inter alia (i) cigars and cigarettes, (ii) chemicals, (iii) cosmetics, (iv) plastic raw materials and products, (v) paper, (vi) machinery parts and electric motors and generators, (vii) electronic integrated circuits and parts thereof. A derogation (subject to a prior authorization) exists for the establishment, operation, maintenance, fuel supply and retreatment and safety of civil nuclear capabilities11, and the continuation of design, construction and commissioning required for the completion of civil nuclear facilities12, the supply of precursor material for the production of medical radioisotopes and similar medical applications, or critical technology for environmental radiation monitoring, as well as for civil nuclear cooperation, in particular in the field of research and development13.

Crypto-assets

There is now a complete ban on the provision of crypto-asset wallet, account or custody services to Russian nationals, resident and entities, removing the previous threshold of CHF 10'000.14

Embargo on military equipment against Russia and Ukraine

In addition to adopting the measures set out in the EU's eighth package of sanctions, the Swiss government has now explicitly included an arms embargo against Russia in the Ordinance by removing Article 2 and replacing it with Article 2a. For reasons of Swiss neutrality, the embargo will also be partially extended to Ukraine.

Up until now, the arms embargo has been implemented in Switzerland largely on the basis of existing war materiel and goods control legislation. By adopting this new Article, the embargo is now explicitly included in the Ordinance15.

Article 2a(1) of the Ordinance prohibits the sale, supply, export and transit of military equipment of all kinds, including weapons and ammunition, military vehicles and equipment, paramilitary equipment, as well as their accessories and spare parts, to or for use in the Russian Federation or Ukraine.

This prohibition does not apply to the temporary export of protective clothing, including bullet-proof vests and helmets, by personnel of the UN, the EU or Switzerland, or media representatives and humanitarian workers, for their personal use16. This prohibitions also does not apply to goods and services that are requested from Switzerland as support by the Organisation for the Prohibition of Chemical Weapons within the meaning of Article X paragraph 7 of the Chemical Weapons Convention of 13 January 1993 (RO 1998 335)17.

Moreover the purchase, acquisition, import and transit of military equipment of any kind, including weapons and ammunition, military vehicles and equipment, paramilitary equipment, as well as their accessories and spare parts, originating in or coming from the Russian Federation are prohibited18.

All the previously mentioned prohibitions do not apply to spare parts and services required for the maintenance, repair and safety of existing military capabilities in Switzerland or in a member state of the European Economic Area (EEA)19.

Derogations (subject to prior authorization by the SECO and FDFA) are possible for the following substances, if they are intended for use in launchers operated by European launch service providers, for use in launchers of European space programmes or for the fuelling of satellites by European satellite manufacturers: hydrazine (CAS No. 302-01-2); unsymmetrical dimethylhydrazine (CAS No. 57-14-7); monomethylhydrazine (CAS No. 60-34-4).20

Amendment allowing the purchase of certain fertilizers

The Swiss government emphasized back in August that Switzerland was determined to contribute to combating the global food and energy crises. Therefore, it decided to amend the Ordinance to allow the purchase of certain fertilizers, provided the goods are destined to a third country outside Switzerland and the European Union. This decision is based on Switzerland's particular importance regarding the global trade in fertilizers.21

1 Available by clicking on this link.
2 Article 12b and Article 35(25) of the Ordinance.
3 Annex 28 of the Ordinance.
4 Article 12b(4) of the Ordinance.
5 Article 12b(4)(c) of the Ordinance.
6 Annex 29 of the Ordinance.
7 Article 28e(1bis) of the Ordinance.
8 Article 28e(2) and (2bis) of the Ordinance.
9 Article 28e(3) of the Ordinance.
10 Annex 17.2 of the Ordinance.
11 Article 6(2)(c) and Article 28e(3)(g) of the Ordinance.
12 Article 11a(4)(d) and Article 28e(3)(g) of the Ordinance.
13 Article 14a(5), Article 14c(6) and Article 28e(3)(g) of the Ordinance.
14 Article 20(2) of the Ordinance.
15 SECO Press release of 23 November 2022, link.
16 Article 2a(5) of the Ordinance.
17 Article 2a(6) of the Ordinance; for the Chemical Weapons Convention of 13 January 1993, click here.
18 Article 2a(2) of the Ordinance.
19 Article 2a(4) of the Ordinance.
20 Article 2a(7) of the Ordinance.
21 SECO Press release of 23 November 2022, link.

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© 2022 White & Case LLP

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