Switzerland Reinforces its Sanctions Against Russia

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Authored by our Global Sanctions Team

On March 4, 2022, Switzerland significantly extended its sanctions against Russia, adopting various measures similar to the financial and trade restrictions recently imposed by the EU. The new sanctions add many asset freezes; ban listed individuals from entering Switzerland; restrict exports of dual-use, high-tech and aircraft-related goods as well as oil/gas equipment to Russia and Ukraine and tighten various monetary and financial sanctions. These measures entered into force at 6:00 p.m. on the same day.

Switzerland has entirely revised its "Ordinance on measures in connection with the situation in Ukraine," which was first issued in 2014 and recently amended on February 28, 2022.

Asset freeze and entry/transit restrictions

The asset freeze that has been in place since February 28, 2022, has been extended to 122 individuals (including some 20 Belarusian nationals and Russian businesspersons such as Igor Sechin, Petr Aven, Mikhail Fridman, Alisher Usmanov, Sergei Roldugin, Gennady Timchenko and Alexey Mordaschov) and one new entity (Gas Industry Insurance Company SOGAZ). The list already included members of the Russian Parliament and government, President Vladimir Putin, Foreign Minister Sergei Lavrov and Prime Minister Mikhail Mishoustin.

  • All assets belonging to or under the control of individuals, companies and entities listed in Annex 8 (previously Annex 3) of the Ordinance are frozen with immediate effect as of 6:00 p.m. It also prohibits the provision, directly or indirectly, of assets or economic resources to those individuals, companies and entities.
  • Entities that hold or manage assets that should be frozen must declare them to the Swiss State Secretariat for Economic Affairs (the "SECO").
  • Individuals targeted by the asset freeze are also banned from entry and transit in Switzerland
  • Switzerland has also partially suspended its visa agreement with Russia.

Financial restrictions

Since 2014, Swiss capital market sanctions have restricted certain dealings in new debt and new equity issued by certain Russian banks and companies and certain affiliates. They have been amended significantly, and other measures in the financial sphere have been introduced.

  • Four additional banks (Alfa Bank, Bank Otkritie, Bank Rossiya and Promsvyazbank) and eight corporations (Almaz-Antey, Kamaz, Novorossiysk Commercial Sea Port, Rostec, Russian Railways, Sevmash, Sovcomflot and United Shipbuilding Corporation) are now subject to the Swiss capital market sanctions. Dealings in transferable securities or money-market instruments of any maturity issued by these and the previously listed entities will be prohibited and no new loans/credit (of any maturity) can be granted to them (though certain exceptions apply).
  • Swiss banks generally can no longer accept deposits of more than CHF 100,000 (in total) from Russian persons, entities or such that are residing in or established in Russia, though limited exceptions—some subject to prior authorization—apply. Swiss banks must now, moreover, regularly report on all such Russian deposits exceeding EUR 100,000. The restriction does not apply to those holding a temporary or permanent residence permit in Switzerland or in a Member State of the European Union.
  • It will be prohibited to provide services on trading venues for the transferable securities of any state-owned legal entity in Russia, and Swiss central securities depositories may no longer provide services for transferable securities issued after April 12, 2022, to Russian persons.
  • No euro-denominated transferable securities issued after April 12, 2022, can be sold to Russian persons or entities; again, this is subject to certain exceptions.
  • As of March 12, 2022, it will be forbidden to provide specialized financial messaging services, used to exchange financial data, to listed banks (Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, Vnesheconombank (VEB), VTB bank ), businesses or entities or to any bank, company or entity established in Russia which is controlled (>50%) by one of the listed banks.
  • Restrictions have been imposed on the Central Bank of Russia, with a ban on all transactions related to the management of its reserves and assets.
  • It is forbidden to provide public financing or financial assistance for trade with, or investment in, Russia, except for prior binding financing commitments, trade in food or for agricultural, medical or humanitarian purposes. Financing up to EUR 10 million per project is, however, still allowed to SMEs established in the EU.
  • It is forbidden to invest in, participate in or otherwise contribute to projects co-financed by the Russian Direct Investment Fund (subject to certain exceptions).
  • There is a prohibition on the sale, supply, transfer, or export of Swiss franc or euro-denominated banknotes (i) to Russia or (ii) to any natural or legal person, entity or body in Russia, including specifically the government and Central Bank of Russia. Only very limited exceptions apply (i.e., personal use of individuals travelling to Russia and for official purposes of diplomatic missions and international organisations in Russia).
  • It is prohibited to honor claims based on a contract or business dealing if its performance has been prevented or affected, directly or indirectly, by the Swiss sanctions. This applies to claims held by all individuals and entities specifically targeted, any Russian individual, company or entity and any person or entity acting on their behalf.

Trade restrictions

Existing restrictions on dual-use items and related services have been greatly reinforced, and new trade restrictions apply to the aircraft, aerospace, oil/gas and high-tech sectors.

  • In addition to an arms embargo, it is now forbidden to sell, deliver, export, transit or transport dual-use items intended for use in Russia, as well as for military use in Ukraine. Financial services, brokerage, technical advice and the granting of financial resources related thereto is banned. Certain exceptions apply.
  • It is forbidden to sell, deliver, export, transit and transport high-tech items intended for use in Russia, as well as for military use in Ukraine. The Swiss list of high-tech items is very similar to the list of high-tech items recently adopted under EU sanctions; this includes items for the electronics sector (e.g., microprocessors, semiconductors), and information security, sensors, lasers, navigation/avionics, marine and aerospace/propulsion items. Financial services, brokerage, technical advice and the granting of financial resources related thereto is banned. Certain exceptions apply. 
  • It is forbidden to sell, deliver, export, transit or transport listed goods related to the aviation and space industry to individuals or entities in Russia or that could be used in Russia. It is also forbidden to provide maintenance, repair or inspection services of aircrafts and aircraft parts (with the exception of pre-flight inspection) in favor of any person or entity in Russia or for the purpose of use in Russia. Brokerage, technical advice, insurance/re-insurance and the granting of financial resources related thereto is banned.
  • It is forbidden to sell, deliver, export or transit listed goods and technology related to the petroleum refining sector to individuals and entities in Russia or that could be used in Russia. The ban covers, for example, delayed cokers, flexicokers and hydrocracking reactors. Financial services, brokerage, technical advice and the granting of financial resources related thereto is equally banned.
  • Adopting sanctions similar to the oil/gas equipment restrictions that the EU has had in place since 2014, the sale, supply, export or transit of listed goods for the oil industry is subject to authorization. This includes oil/gas pipelines and drilling rods for oil or gas extraction. It is now also prohibited to supply certain services related to Arctic offshore, deep-water and shale oil projects in Russia.
  • The import of goods from Crimea, Sebastopol and the areas of Donetsk and Luhansk is generally prohibited as it requires a Ukrainian official certificate of origin. Exports of listed goods to these areas are forbidden. 

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