Sanctions 2026

SWITZERLAND Law and Practice Contributed by: Philippe M. Reich, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG

UN Sanctions Committee established by the relevant UN Security Council Resolution, whereas it will have a certain margin of appreciation in the adoption of designation decisions originating, for example, in the EU, where no automatism applies. However, under the Russia sanctions, all EU designations have been implemented by Switzerland, usually within days. 7.2 Scope of Designation Indirect Designations In addition to persons expressly listed in the annexes to the respective sanctions ordinances, non-designat - ed third parties may qualify as sanctioned parties if the designated person is determined to own or have control over them. Article 15 of the Ukraine Ordinance is a good example of the meaning and impact of “indirect designation”. This provision imposes a freeze of the funds and eco - nomic resources owned or directly or indirectly con - trolled by individuals and entities listed in Annex 8 to the Ukraine Ordinance, individuals and entities acting on behalf of or on the instructions of the latter, as well as entities owned or controlled by these. Thus, this provision subjects to asset freeze not only those des - ignated in Annex 8, but also (i) those acting on behalf of or on the instructions of those designated, and (ii) those entities owned or controlled by those designated. Article 18 of the Ukraine Ordinance provides another example. It restricts the provision of certain services in connection with securities and money market instru - ments with certain maturities and issued after certain dates. This provision subjects to this prohibition hose designated in Annex 9, as well as (i) those foreign enti - ties more than 50% owned by those designated, and (ii) those acting on behalf of or on the instructions of those designated. Concept of Ownership SECO FAQ, question 1.10, defines “ownership” as the fact that the designated person “directly or indi - rectly holds 50% or more of the ownership shares in a company or an organization”. As provided in the judgment of the Federal Administrative Court of 7 November 2023 (B-547/2023), “the Ukraine Ordinance does not define the cases in which an ownership or control relationship relevant under sanctions law is to

be assumed. Swiss case law links this to principles of control and domination under company law and of beneficial ownership” (consideration 4.2). Switzerland follows therefore the same definition of “ownership” as the EU (see EU Best Practices, paragraph 63). SECO also follows an “aggregated” concept of “own - ership”, taking into account the ownership quotas of all designated persons involved in each case (see SECO FAQ, question 1.10), again in alignment with the EU. Concept of Control In accordance with SECO FAQ, question 1.11, if any of the following criteria is met, it is assumed that the enti - ty in question is controlled by a designated person: “a) the natural person, company or organization has the power to appoint and/or remove, formally or de facto, the majority of the members of the administra - tive or management body of the company or organi - zation; b) he or she formally or de facto holds the majority of the voting rights of the company or organization; c) he or she has the right to exercise a dominant influ - ence over the company or organization by virtue of a contract concluded with it or by virtue of a provision laid down in the memorandum or articles of associa - tion; d) he or she has the power to exercise the right to exercise a dominant influence within the meaning of point (c) without itself holding that right; e) he or she has the right to use all or part of the funds and economic resources of the company or organiza - tion or to determine how they are used; f) he or she manages the business of the company or organization on a uniform basis with the preparation of consolidated accounts; g) he or she is jointly and severally liable for the finan - cial liabilities of the company or organization or acts as guarantor for it;

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