Switzerland’s Federal Council has today adopted an order to prevent Switzerland and its banking system being used as a means to circumvent the sanctions adopted by the EU in response to the Ukraine crisis (the “Order“). The statement of the Federal Council can be found here and an English translation, here.
The Order prevents financial intermediaries established in Switzerland from entering into new business relationships with the 33 individuals who have been designated by the EU to date (“EU Designated Persons“) and with any persons acting on their behalf or being owned or controlled by them. The EU Designated Persons are in turn prohibited from transferring assets located outside the EU to Switzerland (they are already prohibited from transferring EU assets to Switzerland pursuant to their EU designations).
The Order does not impact existing business relationships. While these can continue, the Order requires financial intermediaries established in Switzerland to notify Switzerland’s State Secretariat of Economic Affairs (SECO) of such relationships without delay and to provide details of the beneficiary, purpose and value of these. As expressly stated in the Federal Council statement, this will enable the Federal Council to maintain an overall view of the business relationships that the EU Designated Persons have in Switzerland and the assets they maintain there, should Switzerland decide to implement further measures against them (indeed, the Federal Council states that it reserves the right to take other measures if these are warranted).
