SWITZERLAND Law and Practice Contributed by: Philippe M. Reich, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG
h) as a lender, he or she formally and/or de facto exer - cises a controlling influence on the decisions of the management.” These criteria may be met individually or based on agreements with another shareholder or a third party. The presumption established by meeting any of these criteria can be rebutted on a case-by-case basis (see SECO FAQ, question 1.11; see also below on “ring- fencing”). These criteria coincide with those in the EU Best Practices, paragraphs 63-65. In addition, SECO takes into account the following non-exhaustive criteria to assess whether funds or economic resources have been formally transferred to third parties, but the designated person still exercises control over them: • “the close relationship (family, business, personal) between the person directly subject to the asset freeze and the third party; • the economic and/or professional independence of the third party who is now the nominal owner of the funds or economic resources; • the value and frequency/regularity of the benefits in question in comparison with benefits to the third party that were made before the sanction was imposed; • existence and content of formal agreements between the sanctioned person and the third party; • compliance with the arm’s length principle in the transfer of value (eg, terms of sale of company shares)” (see SECO FAQ, question 1.12). Under the last criterion, transactions must take place under the same conditions as would be agreed between unrelated third parties in an environment of free compe - tition and under comparable circumstances. Measures of Ring-Fencing Where the above-mentioned ownership or control is established with regards to entities significant for the economy, operating in sensitive sectors or employing a significant workforce, SECO supports the imple - mentation of ring-fencing measures. Ring-fencing in this sense aims at removing the designated person from the day-to-day operations and any business decisions of the entity that they own or control and the
resulting resources and profits. Ring-fencing meas - ures enable the affected entity to continue operating (ie, having access to funds and economic resources as well as receiving services), under the new condi - tions, free from the ownership or control of a desig - nated person. The ultimate goal of such measures is to refute the presumption of ownership or control of the designated person. Provisions with licensing grounds to enable the establishment of ring-fencing in the Ukraine Ordinance In a situation of presumed ownership or control of an entity by a designated person, the relevant restrictive measures would also apply to the non-designated entity. The Ukraine Ordinance provides for licensing grounds in Articles 15 paragraph 10 and 28e para - graph 13, in the event that the establishment, cer - tification or evaluation of ring-fencing measures is hindered by such restrictive measures. Beneficiaries of the ring-fencing measures SECO requires that the beneficiaries of ring-fencing measures are companies or organisations established in Switzerland, significant both in terms of their market position and their employment volume, active in the sectors of food production, pharmaceuticals, fertiliz - ers, chemicals, water management and wastewater treatment or nuclear power, for being regarded as “essential” (SECO FAQ, question 1.13). This coincides with the criteria of the EU, which take into account the positioning and significance of the entity on a national market or the European market, both in terms of mar - ket positioning and employment volume, as well as its activity in any of those “essential” sectors (see EU Guidance Note – Implementation of Firewalls in cases of EU entities owned or controlled by a designated person or entity, p. 3). Types of measures The measures must prevent designated individuals or entities from exercising their rights in relation to their ownership or control and ensure that no funds or economic resources are made available directly or indirectly to the designated person (SECO FAQ, ques - tion 1.13). Such measures should accordingly:
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