On 31 August 2022, the Swiss Federal Council decided on the implementation of further EU sanctions (namely the remaining measures of the seventh sanctions package), revising the Ordinance on Measures connected with the Situation in Ukraine (the “Ordinance“) accordingly. These amendments render the Swiss sanctions again in line with the EU sanctions, including on already previously adopted but not yet implemented measures. The amended Ordinance entered into force on 31 August 2022 at 18:00 CET.
In summary, these latest amendments, the most relevant of which are summarized below, include:
- Adjustments to various exemptions;
- Clarifications of various provisions;
- Significant changes to the deposit restrictions; and
- New public procurement related bans.
Dual-use Goods and Goods for Military and Technological Enforcement
The exemption from the scope of the ban on the sale, supply, export, transit and transport of dual-use goods (Article 4 of the Ordinance) and of goods for military and technological enforcement (Article 5 of the Ordinance), and the provision of related services, for goods and services intended to ensure cybersecurity and information security was removed.
Instead, goods and services intended to ensure cybersecurity and information security may henceforth merely be exceptionally licensed by SECO, and for civilian purposes or civilian end-users only.
Goods for Industrial Strengthening
Under the ban on the sale, supply, export, transit and transport of goods for industrial strengthening and the provision of related services (Article 11a of the Ordinance), an exceptional license may be granted by SECO only if necessary for:
- medical or pharmaceutical purposes with a non-military end use;
- humanitarian or evacuation purposes; or
- the exclusive use by Switzerland to meet its maintenance obligations in areas subject to a long-term lease agreement between Switzerland and the Russian Federation.
The exemption from the scope of the ban on the sale, supply, export, transit and transport of luxury goods listed in Annex 18 (Article 14b of the Ordinance) was extended to jewellery and gold owned and carried by individuals leaving Switzerland destined for private use and not for sale.
There were also minor amendments to the Annex on luxury goods (Annex 18).
At last, Article 15 of the Ordinance was amended to reflect standard Swiss sanctions language for asset freezes (e.g. as under the Belarus sanctions ordinance) and thus now expressly requires the freezing of funds and economic resources owned or controlled, directly or indirectly, by:
- individuals, entities and organizations listed in Annex 8;
- individuals, entities and organizations acting on behalf of or on the instructions of the individuals, entities and organizations referred to in subparagraph a.;
- entities and organizations owned or controlled by individuals, entities and organizations referred to in subparagraphs a. or b.
Deposits and Crypto-Assets
After months of back and forth between the EU and Switzerland on whether or not to apply a “look-through” approach under the deposit restrictions in their respective FAQs, the EU had caught Switzerland by surprise when introducing a “look-through” concept in its Regulation. Switzerland now aligned and amended not only Article 20 of the Ordinance but also its FAQ accordingly. Therefore, the deposit restrictions have been extended to banks, companies or organizations established outside Switzerland or the EEA in which more than fifty percent of the shares are held directly or indirectly by Russian nationals or individuals resident in Russia.
The amendment also removed the exemption to the restrictions for deposits and crypto-assets used for non-prohibited cross-border trade in goods and services between Switzerland, the EEA and Russia. Instead, individual exceptional licenses may be granted by SECO henceforth.
Last, but not least, Switzerland implemented the public procurement bans previously introduced by the EU, but delayed for reasons of clearing competences between the Swiss Confederation and its Cantons. According to the new Article 29c of the Ordinance, it is prohibited to award public contracts to (i) Russian nationals or individuals resident in Russia, (ii) legal persons, entities or organizations domiciled in Russia, (iii) legal persons, entities or organizations in which natural or legal persons, entities or organizations under (i) or (ii) hold more than fifty percent, directly or indirectly, or (iv) legal persons, entities or organizations acting on behalf of or on the instructions of natural or legal persons, entities or organizations under (i), (ii) or (iii). The conclusion of procurement contracts with any of the above parties is also prohibited.
All procurement contracts whose performance has not yet been completed must be terminated by 28 February 2023.
The prohibition also applies to awards and procurement contracts in which subcontractors or suppliers that qualify as any of the above parties participate with more than ten percent of the tender value. The prohibition does not apply to Russian nationals residing in Switzerland and majority held legal persons, entities or organizations already domiciled in Switzerland. There are also several grounds for exceptional licenses by SECO.
The latest version of the Ordinance is available here.