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
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.
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.
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.
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.
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”).
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)
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.