Sanctions

The banks in Switzerland maintain strict compliance with the applicable national, international and supranational regulations and sanctions. The main focus in this respect is currently on the measures related to the war in Ukraine.

The Swiss Confederation may enact compulsory measures in order to implement sanctions that have been ordered by the United Nations Organisation, by the Organisation for Security and Cooperation in Europe or by Switzerland’s most significant trading partners and which serve to secure compliance with international law, and in particular the respect of human rights (Art. 1 para. 1 Embargo Act). The Federal Council has the authority to enact compulsory measures (Art. 2 para. 1 Embargo Act).

The Swiss Bankers Association’s position

  • Swiss banks maintain strict compliance with all applicable laws and measures, including sanctions imposed by Swiss, international and supranational bodies.
  • The banks have checks and processes in place to ensure that regulations are adhered to and prevent violations. Integrity and reputation are vital success factors for the financial centre.
  • Switzerland has put in place a strict and effective apparatus to combat money laundering, including extensive due diligence and reporting requirements. The Swiss Bankers Association (SBA) supports the continual development of compliance measures.
  • Switzerland and its financial centre want a sanctions policy that is effective and compliant with the rule of law. Achieving that will require all parties involved to work together. The Swiss Bankers Association is making its contribution by drawing up five guiding principles to address the challenges of Swiss sanctions policy.

At present, the measures in connection with the situation in Ukraine are a priority. The Federal Council decided on 28 February 2022 to adopt the European Union’s sanctions against Russia and thus reinforce their impact.  The SBA liaises closely with the authorities on questions concerning the implementation of the sanctions and provides its members with an information and knowledge sharing platform.

Russian clients’ assets held at banks in Switzerland

Various questions that are being asked in relation to Russian clients’ assets held at banks in Switzerland are answered below.

What is the SBA’s estimate of Russian clients’ assets held at banks in Switzerland? 

The Swiss Bankers Association estimated the assets held by Russian clients at banks in Switzerland in March 2022 at approximately CHF 150 billion. That is the figure for financial (“bankable”) assets managed at banks in Switzerland. Real estate, shares of unlisted companies, artworks, vehicles, boats and other assets are not considered bankable, and are therefore not included in the estimate.

How did the Swiss Bankers Association arrive at this estimate? 

The Swiss Bankers Association calculated this figure from estimates provided by the industry and consulted various market experts to verify its plausibility. It is a market estimate. Owing to the lack of precise statistical data and the volatility of financial markets, it is not possible to determine an exact figure.

How are “Russian clients” defined? 

Russian clients are Russian citizens as well as natural persons resident in the Russian Federation. For the purposes of the SBA’s estimate, Russian clients therefore also include individuals who hold one or more other passports in addition to their Russian passport (dual citizens) as well as Russian citizens resident outside Russia.

How does the SBA estimate relate to the frozen funds and economic resources of CHF 5.8 billion along with 17 properties reported to SECO as of 31 December 2023? 

The funds and economic resources frozen and reported to SECO under Article 15 et seq. of the Ukraine Ordinance are owned or controlled by persons, companies and organisations listed by name in Annex 8 of the Ordinance on measures in connection with the situation in Ukraine (often referred to simply as “sanctioned persons”).

How does the SBA estimate relate to the reports submitted to SECO on the basis of the deposit restrictions set out in Art. 21 of the Ukraine Ordinance by 3 June 2022, detailing deposits amounting to CHF 46.1 billion (as per the SECO press release dated 1 December 2022)? 

The prohibition on new deposits exceeding a total of CHF 100,000 set out in Art. 20 of the Ukraine Ordinance applies only when a client’s total deposits with a specific bank or institution are above the ceiling of CHF 100,000. Art. 21 of the Ordinance stipulates that in such cases, a report must also be made to SECO. Existing deposits in excess of CHF 100,000 must be reported to SECO in aggregate form. Specifically, the number of business relationships affected and the sum of currently affected balances must be reported.

Moreover, the reporting requirement under Art. 21 of the Ukraine Ordinance only applies to business relationships that fall within the scope of Art. 20 paras 1 and 2 of the Ordinance. This means that up until the 3 June 2022 deadline for submitting reports, all Russian citizens and Russian clients who are also citizens of Switzerland (Swiss-Russian dual citizens) or an EEA member state1 (Russia-EEA member state dual citizens) were exempt from the reporting requirement, as were natural persons who hold a temporary or permanent residence permit in Switzerland or an EEA member state. In practice, this means that a large proportion of the Russian clients’ assets under management at banks in Switzerland are exempt from the deposit restrictions and do not have to be reported to SECO. Switzerland is implementing this measure in line with the EU.
 

1 The 30 EEA member states are the 27 EU member states (Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Sweden, Slovakia, Slovenia and Spain) as well as Iceland, Liechtenstein and Norway (source)

What is the value of assets held by Russian clients at foreign branches of Swiss banks? 

Our estimates relate to transactions booked in Switzerland (“booking centre Switzerland”), i.e. all banking business conducted by banks in Switzerland under their Swiss banking licence. We cannot comment on the affected assets held at Swiss banks in other booking centres. These centres are subject to the sanctions and reporting requirements of the countries concerned, which can be contacted directly to obtain information on this matter.

Experts

Felix Muff
Head of Legal & Compliance
+41 58 330 62 17