SWITZERLAND Law and Practice Contributed by: Philippe M. Reich, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG
in connection with the situation in Ukraine (“Ukraine Ordinance”) has meant that companies that are exclusively subject to Swiss jurisdiction are granted a greater level of flexibility than companies that are sub - ject to EU jurisdiction. Switzerland has – eg, at times deviated in its implementation of EU financial sanc - tions by adopting broader exemptions to the restric - tions on deposits, trusts and the sale of transferable securities. It has also limited the scope of the deposit restrictions. Although many banks are also subject to other sanctions regimes and therefore tend to apply the stricter EU measures, Switzerland is attempting to offer financial institutions greater leeway. However, there are instances where SECO has adopted a very restrictive interpretation of excep - tions and exemptions, even for companies operat - ing in the healthcare industry, which has tradition - ally been impacted less by sanctions. For example, SECO tends towards a more restrictive interpretation of the scope of the exemption for goods and services intended for “medical or pharmaceutical purposes” under Article 6 paragraph 2 letter l or the licensing ground of “medical or pharmaceutical purposes with an end use of a non-military character” under Article 11a paragraph 4 letter a of the Ukraine Ordinance. In these cases, SECO is concerned with the risk of diver - sion and requires operators to have oversight over the supply chain. SECO typically requires evidence of a robust supply chain traceability system and identifica - tion of end-users. 1.4 Overview 1.4.1 Types of Sanctions Competence for Adopting Sanctions The Federal Council (ie, the Swiss government) is competent to issue sanctions in the form of ordinanc - es based on the Federal Act on the Implementation of International Sanctions (Embargo Act, “EmbA”; Article 2 paragraphs 1 and 3). Types of Sanctions According to Article 1 paragraph 3 EmbA, sanctions may: “a. directly or indirectly restrict transactions involving goods and services, payment and capital transfers, and the movement of persons, as well as scientific, technological and cultural exchange; b.
include prohibitions, licensing and reporting obliga - tions as well as other restrictions of rights”. Switzerland currently has 28 sanctions ordinances in force. The following are examples of the type of meas - ures contained therein, beyond those that form part of the “traditional sanctions toolkit” (namely prohibiting the sale, supply, etc, of war material and other military items). • Prohibition of the sale, supply, export, etc, of dual- use goods and of ancillary services (namely Russia, Belarus, Iran). • Prohibition of the sale, supply, export, etc, of equipment, technology and software that can be used to monitor and intercept internet and tel - ephone traffic and of ancillary services (eg, Iran, Myanmar, Syria). • Prohibition of the sale, supply, export, etc, of certain luxury goods and of ancillary services (eg, Russia, North Korea). • Prohibition of the sale, supply, export, etc, or of the purchase, import, etc, of certain precious metals and of ancillary services (eg, Russia, North Korea). • Prohibition of the provision of certain services or software and of ancillary services (namely Russia, Belarus). • Freezing of funds and economic resources directly or indirectly owned or controlled by designated persons and prohibition to make funds and eco - nomic resources available directly or indirectly to such sanctioned persons, as well as reporting obligations for those who hold or administer frozen assets (eg, terrorist groups, Russia, Belarus, Iran, Myanmar, Syria, North Korea). For more details on current types of sanctions, see 5. Trade and Export Restrictions . 1.4.2 Scope of Sanctions Territorial Scope of Swiss Sanctions The EmbA and the ordinances establishing coercive measures do not expressly regulate the territorial scope of application of Swiss sanctions. However, it is the established understanding in law and practice (also in light of so-far failed attempts to introduce the so-called personality principle applicable to EU and
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