Insights | 14 April 2022

Newsflash – Switzerland announces further sanctions to be adopted against Russia and Belarus

On 13 April 2022, the Swiss Federal Council adopted the fifth sanctions package against Russia and Belarus introduced by the European Union on 8 April 2022 in response to the war in Ukraine (see Swiss press release here and EU press release here).

The Swiss Ordinance on Measures in Connection with the Situation in Ukraine will be updated in the coming days to reflect these additions. However, the Swiss Federal Council adopted this most recent round of EU sanctions against Russia and Belarus with the exception of the bans on ports for Russian vessels and use of roads to transport goods by Russian and Belarussian undertakings, which were unnecessary given Switzerland’s geographic location.

While the scope of these sanctions are far reaching, the sectoral sanctions are particularly relevant to the Swiss trust industry. In the case of trusts, the EU sanctions prohibit the provision of a registered office, business or administrative address as well as management services to a trust or any similar legal arrangement having a trustor or beneficiary that is a Russian national, Russian resident or legal persons, entities or bodies established in Russia.

The sanctions will also affect Switzerland’s role as a hub for international trade. In light of the fact that 35% of the global coal trade transacts through Switzerland (see here, p. 13), the trade restrictions relating to fossil fuels, in particular coal, will have a significant impact both locally as well in the global markets. As such, Switzerland plays an increasing role in preventing the circumvention of international sanctions.

LALIVE will continue to monitor these changing sanctions and their effects as the situation develops.

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