Financial Crime World

Switzerland Slaps Financial Sanctions and Embargoes on Russia Amid Ongoing Military Aggression Against Ukraine

Additional Sanctions Against Russia in Response to Military Aggression Against Ukraine

The Federal Council has adopted additional sanctions against Russia in response to its ongoing military aggression against Ukraine. The new measures, which come into effect on February 1st, bring Switzerland’s total number of sanctioned individuals and entities to over 1,700.

Building on EU Sanctions Package

The European Union (EU) had previously introduced its 12th package of sanctions against Russia in December, aimed at tightening the implementation and enforcement of existing sanctions and combating their circumvention. Switzerland followed suit by expanding its own sanctions lists to include a further 147 individuals and entities on December 21st.

Phased Ban on Russian Diamonds

Among the new measures is a phased ban on the purchase and import of Russian diamonds, joining the G7’s agreement in December to deprive Russia of this important revenue stream. The Swiss government will work with relevant sectors to ensure the new restrictions are coordinated internationally and implemented efficiently.

Import Bans and Prohibited Goods

Import bans have also been introduced on certain goods that generate significant revenue for the Russian state, including:

  • Pig iron
  • LPG (liquid petroleum gas)

The lists of prohibited goods that could strengthen Russia’s military and technology capabilities or enhance its industrial sector are being expanded to include:

  • Chemicals
  • Lithium batteries
  • Certain motors for unmanned aerial vehicles
  • Machine tools and machinery parts

Financial Sector Measures

In the financial sector, Russian nationals and individuals living in Russia will be banned from controlling companies in Switzerland that provide crypto-asset services. Additional measures have been introduced to support enforcement of the oil price cap for Russian crude oil and petroleum products and to counteract attempts to circumvent the cap.

  • Market participants are now required to exchange itemized price information with each other and with competent authorities on request.
  • New reporting and authorization requirements will be introduced to monitor the sale of tankers that may be used to circumvent the oil price cap.

Services Sector Measures

In the services sector, a ban has been imposed on providing software for the management of enterprises and software for industrial design and manufacture to Russian companies. Exceptions have been made for the provision of services to Russian subsidiaries of Swiss companies.

Notification Requirement for Fund Transfers

The EU’s 12th sanctions package also includes a notification requirement for the transfer of funds out of the EU from EU-based companies controlled by Russians or individuals or entities established in Russia. However, Switzerland has decided not to introduce this requirement for now, instead instructing its Federal Department of Economic Affairs, Education and Research (EAER) to examine whether such a requirement should be implemented in Switzerland.

Review and Additional Measures

The Swiss government will review the effectiveness of the new sanctions and consider additional measures as necessary to maintain pressure on Russia to cease its military aggression against Ukraine.