On 21 August 2024, the Swiss Federal Council announced the adoption of certain measures included in the European Commission’s 14th package of sanctions against Russia, which will enter into force on 27 August 2024 (the official media release is available here). The adoption of further measures of the 14th EU package is currently under consideration by the Swiss Federal Council.
The newly adopted measures mainly consist in (i) an alignment with the EU diamond ban, and (ii) the extension of the deadlines for exit licences regarding controlled goods (and related services) and banned services and software to 31 December 2024. As was to be expected given the conceptual difference between the EU licensing regime and the Swiss reporting approach, the deadline for the submission of notifications under Art. 28e para. 6 of the Ukraine Ordinance (services and software provided to Russian subsidiaries of entities established in Switzerland, in the EEA or in a partner state), which lapsed on 31 July 2024, was not extended by the Swiss Federal Council. Therefore, the second notification under Art. 28e para. 6 of the Ukraine Ordinance is due by 31 January 2025.
The adopted measures in detail:
Extension of the scope of the exception in Art. 14c para. 5 let. a no. 2 of the Ukraine Ordinance
With regard to the prohibition on the purchase, import, transit and transportation in or through Switzerland of goods listed in Annex 20 of the Ukraine Ordinance (economically significant goods for the Russian Federation), the Swiss Federal Council has extended the scope of the exception in Art. 14c para. 5 let. a no. 2 of the Ukraine Ordinance. As of 27 August 2024, the respective prohibitions do, inter alia, no longer apply to purchases in the Russian Federation that are necessary for the personal use of natural persons with a temporary or permanent Swiss residency permit and their immediate family members.
The equivalent exemption pursuant to Art. 3i paras. 3a and 3aa of Council Regulation (EU) No 833/2014 only refers to the personal use of nationals of Member States or of persons travelling to the EU and their immediate family members, without referring to holders of a valid residence permit.
Extension of the scope of the prohibition of diamond trading in Art. 14e of the Ukraine Ordinance and additional grounds for exceptions
Following the European Commission’s 14th sanctions package, Art. 14e of the Ukraine Ordinance stipulating restrictions on diamonds has been extended in scope. The amended prohibition covers the purchase of diamonds in accordance with Annex 27a nos. 1 and 2 that (i) have been processed in a third country, (ii) consist of or contain diamonds from the Russian Federation or originating in the Russian Federation, and (iii) weigh at least 0.5 carats or 0.1 grams per diamond (para. 3). The same provision further prohibits the import, transit and transportation of these goods into and through Switzerland.
Further exceptions have also been added to Art. 14e of the Ukraine Ordinance. Inter alia, the prohibitions according to paras. 1, 3 and 4 do not apply if the following is proven at the time of import and stated on the customs declaration (para. 6bis):
- in the case of goods under customs tariff numbers 7102 10 00, 7102 31 00 and 7104 21 00, that the goods were physically present in Switzerland or the EU prior to the date of entry into force of the respective prohibition and they were subsequently exported to a third country other than the Russian Federation;
- in the case of goods under customs tariff numbers 7102 39 00 and 7104 91 00 and according to Annex 27a no. 3, the goods were physically present in a third country other than the Russian Federation, processed or manufactured there, before the entry into force of the respective prohibition.
The equivalent exemptions in Art. 3p paras. 11 and 12 of Council Regulation (EU) No 833/2014 are slightly broader as they apply to all products listed in Parts A, B and C of Annex XXXVIIIA and not only to the goods with mentioned customs tariff numbers.
Finally, for imports of diamonds from or originating in the Russian Federation of the above carat category which are processed in a third country, the proof of origin to be provided with the customs declaration no longer needs to refer to products containing diamonds, but only to processed diamonds (para. 8).
Extension of deadlines regarding exit licenses until 31 December 2024
Finally, the deadline for applying for a licence for (i) activities in relation to restricted goods (and related services) (cf. Art. 30a paras. 1, 2bis and 3 of the Ukraine Ordinance) and (ii) the provision of services and software falling under the services ban according to Art. 28e of the Ukraine Ordinance (cf. Art. 30c para. 1 of the Ukraine Ordinance) which are necessary for the withdrawal of investments from the Russian Federation or the termination of business activities in the Russian Federation has been extended to 31 December 2024 from 30 June 2024 (in case of Art. 30a) and 31 July 2024 (in case of Art. 30c), respectively.
This extension coincides with the extension granted in Council Regulation (EU) No 833/2014 for authorizing conduct which is strictly necessary for the divestment from the Russian Federation or the wind-down of business activities in the Russian Federation.
This is the first time Switzerland in a first step adopts only certain substantive EU sanctions measures. However, given that the 14th EU package was adopted just before the long summer leave, it may just well be that the most imminent changes were prioritized. It now remains to be seen when and to what extent Switzerland will align also with the remaining latest EU sanctions measures or apply a “Swiss finish” as in other previous instances.
