The Swiss President and the State Secretary for Foreign Affairs held a media conference yesterday which left all observers confused and received mostly criticism from Swiss Parliament. The President started by stating that yesterday was a dark day for Europe and diplomacy had failed. The Russian Ambassador had again been summoned and informed about Switzerland’s unequivocal condemnation of this inacceptable massive violation of international law (namely the principles of non-violence and territorial integrity). The President continued by saying that neutrality did not mean indifference.
He then generally referred to the first set of EU sanctions adopted on Wednesday and the expected further EU sanctions to follow which will guide the Swiss reaction as in the past. He stressed that Switzerland had back in 2014 consciously not aligned with EU sanctions, but adopted anti-circumvention measures. While a stronger response was called for yesterday, the Swiss concept would remain that of anti-circumvention measures with respect to the EU sanctions, with some fine-tuning in particular with respect to financial sanctions. As a first step, the EU list of designated parties of 23 February shall be reflected in the current Swiss measures, which as of now still only means that financial intermediaries may not open any business relations with such parties and will have to notify existing business relations – but not an asset freeze. As for any other measures, namely a more nuanced application of financial sanctions, further goods controls and capital market restrictions as well as the extension of the Crimea related prohibitions to other occupied territories, the respective “Ordinance on Measures for the Avoidance of the Circumvention of International Sanctions in Connection with the Situation in the Ukraine” will have to be formally amended by the Federal Council, upon consultation with the concerned Departments, which will take a few days and will have to factor in the status of EU sanctions dynamically evolving.
While thus no details of the proposed set of Swiss measures have been disclosed yet, as an analysis of the EU sanctions is still ongoing, there is no doubt that the overall effects will be significant nonetheless, not least by the indirect impact of foreign direct sanctions against Swiss domiciled entities or of secondary sanctions which will force most Swiss companies to ultimately comply with EU or even US sanctions as a matter of practice.
The reason for the Swiss government sticking to the concept of anti-circumvention measures rather than alignment with EU sanctions foremost lies in its interest to remain open to the involved parties for (diplomatic) good services and protection mandates (which Switzerland already has in the conflict between Russia and Georgia).
