Ukraine: Switzerland implements further measures in 14th EU sanctions package

The Federal Council

Bern, 16.10.2024 - On 16 October, the Federal Council decided to adopt most of the measures in the EU’s 14th package of sanctions against Russia. The new measures will come into force on 17 October. On 8 July, 116 individuals and entities were already added to Switzerland's sanctions list, and on 21 August the first measures in the 14th sanctions package were adopted.

The EU adopted its 14th package of sanctions against Russia on 24 June in response to Russia's continued military aggression against Ukraine and its destabilising actions undermining Ukraine's territorial integrity, sovereignty and security. The aim is to strengthen the enforcement of existing sanctions to prevent their circumvention, and to apply new sanctions in order to weaken Russia's ability to wage war.

On 8 July, the Federal Department of Economic Affairs, Education and Research (EAER) had already imposed sanctions on 116 additional individuals and entities within its jurisdiction. This means that around 2,250 individuals, companies and organisations in Switzerland are currently on the sanctions list in connection with the situation in Ukraine. The list is identical to that of the EU. On 21 August, the Federal Council decided to adopt further measures in the EU's 14th package of sanctions against Russia. The international harmonisation of bans on Russian diamonds was a particular focus of these sanctions. After a detailed examination, the Federal Council decided on 16 October to adopt the remaining measures in the 14th sanctions package that concern Switzerland, thereby strengthening the impact of the sanctions.

Measures in the goods sector

This decision further tightens export restrictions on goods intended to strengthen Russia's industrial sector and military and technological capabilities. In addition, the list of entities subject to tighter export restrictions will be extended by 61 entities. Around half of these entities are located in third countries and are linked to the Russian military complex. The Federal Council had already decided on 31 January that companies would have to contractually prohibit the re-export to Russia of certain critical goods (common high priority items) when exporting to third countries. An equivalent obligation has now been introduced for the transfer of intellectual property rights and trade secrets, in order to prevent industrial know-how transferred to third countries from being used to produce such goods for use in Russia. In addition, there is now a ban on the purchase and import of Russian helium.

Measures in the financial sector

The use of certain specialised financial messaging services for payment transactions (i.e. alternatives to SWIFT) will be prohibited for banks. The Federal Council has also introduced various legal provisions on transaction bans. One of these concerns crypto assets providers that facilitate transactions supporting Russia's defence industry. These new sanctions will curb the ability of the Kremlin to channel funds to finance its war machine.

Measures in the energy sector

The Federal Council has introduced several sanctions targeting liquefied natural gas (LNG). It will now be prohibited to invest in LNG projects under construction in Russia or to supply such projects with the necessary goods. From March 2025, it will also be prohibited to provide services for the transshipment of Russian LNG on EU territory. The new sanctions package also prohibits the purchase, import and transport of Russian LNG via terminals in the EU that are not connected to the gas pipeline network.

Protection for Swiss individuals and entities

In order to better protect Swiss companies, the Federal Council has introduced legislation that enables them to sue companies targeted by sanctions in the Swiss courts to claim damages for losses that the Swiss companies have incurred as a result of arbitrary proceedings in Russia or third countries. The same applies to Swiss individuals and companies whose assets have been unlawfully expropriated in Russia.

The EU has also imposed restrictions on accepting applications for the registration of certain intellectual property rights (brands, patents, etc.) by Russian nationals and companies. This is because the Russian government and courts have taken measures to illegitimately deprive EU intellectual property rights holders of their protection in Russia. The situation for Swiss companies is different, as there have been no intellectual property rights violations committed by Russia against Swiss companies. The Federal Council has therefore decided not to adopt this measure to protect Swiss companies; however, it will continue to monitor the situation.

Subsidiaries abroad

With the 14th sanctions package, the EU has introduced a general obligation for businesses to ensure that their subsidiaries in third countries do not undermine the EU's sanctions. Swiss law typically only covers situations that occur on Swiss territory. However, there may be cases where Swiss law applies, for example where payments are made or instructions issued from Switzerland that are prohibited by the sanctions. This allows Swiss companies that use their subsidiaries to circumvent sanctions to be prosecuted. SECO is currently examining a number of cases in which Swiss companies are suspected of violating sanctions through their subsidiaries abroad. The Office of the Attorney General of Switzerland has taken over one of the cases. Under the current sanctions law, Switzerland already has the means to prosecute companies for circumventing sanctions by using their subsidiaries, and is actively doing so. Against this background, the Federal Council has decided not to adopt this EU measure in its current form. The EAER will monitor the situation and inform the Federal Council in the event of any changes in the position.

Further measures

Sanctions have also been imposed in relation to 27 ships involved in Russia's war against Ukraine, including vessels belonging to Russia's 'dark fleet' (ships that deliver goods with military applications to Russia, circumvent the international oil price cap in defiance of international standards, or carry grain looted from Ukraine). The measures include bans on providing services, including financial services, to such vessels or on acquiring or operating them.

In order to limit Russia's influence on democratic processes in Switzerland, the Federal Council has also decided to prohibit political parties, NGOs and media service providers from accepting donations from the Russian government. As in the EU, exceptions are provided for, to ensure the right to freedom of expression, information and the media, for example.

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Address for enquiries

Enquiries from the media: EAER Communications, info@gs-wbf.admin.ch, +41 (0)58 462 20 07

Enquiries from businesses: sanctions@seco.admin.ch, +41 (0)58 464 08 12

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The Federal Council
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Federal Department of Economic Affairs, Education and Research
http://www.wbf.admin.ch