Effective as of 6 p.m. CET, Wednesday 27 August 2014, the Swiss Federal Council has overhauled the Swiss Ordinance of 2 April 2014 on measures to prevent the circumvention of international sanctions imposed as a result of the situation in Ukraine. The revisions are aimed at preventing the circumvention of sanctions imposed by the EU in July 2014, as reported in our blog post here. In addition, some of these measures reflect Switzerland’s decision not to recognise the Russian annexation of Crimea. In particular:
1) Financial restrictions – the recent amendments provide for:
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An obligation to obtain prior authorisation when five Russian banks (i.e., Gazprombank, Rosselkhozbank, Sberbank, Vnesheconombank (Veb), and VTB Bank), banks or other entities outside Switzerland controlled by more than 50% by such banks or any banks or entities acting on behalf or upon the instructions of such banks or entities issue long-term (ie more than 90 days) financial instruments. Such authorisation will only be granted if the issues are “within the average financial engagement of the past three years”. The Federal Council stated that it is intending to mirrow the EU exemptions, by exempting subsidiaries of these Russian banks that are operating in Switzerland and in the EU.
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An obligation to notify monthly secondary trading in such financial instruments newly issued outside Switzerland and the EU.
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A prohibition from entering into new business relationships with eleven additional individuals and entities listed here as well as with individuals or entities acting on behalf or upon instructions of such listed persons or entities owned or controlled by such individuals or entities. There is also an ongoing obligation to notify any existing business relations with the listed persons. A full consolidated list is available here.
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A prohibition of financing and investments in the transport, telecommunication and energy sectors and for the use of oil, gas and mineral resources in Crimea and Sevastopol.
2) Export restrictions – the amendments introduce:
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A new criterion for refusing export licence applications for military and dual-use goods. In particular, the Federal Council will deny licence applications if the goods are intended to be used exclusively or partially for military purposes, or if they are intended for a military end user. This does not apply to transactions concluded prior to 27 August 2014.
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A ban on imports of war material from Russia and Ukraine.
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An obligation to notify exports, sales, supplies and transshipments of certain listed goods used in the extraction of oil in deep sea, Arctic or shale gas projects in Russia.
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A ban on exports, sales, supplies and transshipments of certain listed goods, as well as financing related thereto, to Crimea and Sevastopol. This does not apply to transactions concluded prior to 27 August 2014.
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A requirement for a certificate of origin issued by a Ukrainian authority for goods imported from Crimea or Sevastopol and a ban on financing of imports of goods without such certificate. This does not apply to transactions concluded prior to 27 August 2014.
Details of these restrictions are available in German, French and Italian here.
The accompanying press release issued by the Swiss State Secretariat for Economic Affairs also includes an acknowledgment of the recent retaliatory measures taken by Russia, as reported here and a statement that no Swiss measures are currently promoting Swiss exports to Russia.
