SWITZERLAND Trends and Developments Contributed by: Philippe M. Reich, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG
SECO designed the corresponding notification form to gain information (every six months) on the following: • how many Swiss-based companies continue to provide; • what type of (otherwise banned) services or soft - ware to Russian companies (qualifying under the group exception); and • what approximate (objective) value “as if” in a third-party context (ie, disregarding intra-group valuation). With regards to the last point above, in the notification form, SECO provides that, if the value is based on wage costs, average values are accepted (eg, aver - age value in the list of gross earned income per year of full-time employees by occupational status). Wage costs are just one way of quantifying the value of a service and other plausible methods are also possible. Companies continue to grapple with how to value the services and software they continue to provide to Russian group entities. The valuation of services is particularly problematic where companies provide intra-group services free of charge. In such cases, and in the absence of specific guidance from SECO, it is up to the companies to come up with and explain the best suitable objective valuation (eg, at-arm’s-length consideration, number of FTE providing/receiving ser - vices). Trends in the Financial Sector The financial services industry is a sector of crucial importance for Switzerland. SECO has therefore treaded a fine line between full implementation of the relevant EU sanctions measures and ensuring a prag - matic approach for the financial sector. This has led to significant discrepancies over time between how Swiss and EU sanctions are applied in this area in practice. Although Switzerland has essentially copied the sanctions measures imposed by the EU in its Ukraine Ordinance, it has deviated significantly in the SECO guidance (ie, the SECO FAQ). For instance, Switzer - land broadened the range of Russian parties that are exempt from the application of the deposit restric - tions under Article 20 of the Ukraine Ordinance, the
restriction on providing management services to trusts under Article 28d of the Ukraine Ordinance and the restriction on sales of transferable securities to Rus - sian parties under Article 23 of the Ukraine Ordinance. Based on the SECO FAQ, nationals of Monaco, Andorra or the United Kingdom and natural persons who hold a temporary or permanent residence permit in Monaco, Andorra, the United Kingdom, Gibraltar, the Isle of Man or the Channel Islands are not subject to the prohibition set out in Articles 20, 23 and 28d, thus deviating from EU sanctions. The broadening of the exemption under Swiss law has provided greater flexibility to Swiss banks as opposed to banks which are subject to EU law. Another example of a different Swiss approach to the financial sanctions is the interpretation of the National Settlement Depository (NSD) as a designated party. The NSD was designated under Article 15 paragraph 1 of the Ukraine Ordinance (listed in Annex 8 of the Ukraine Ordinance). This means that all assets of or under the control of the NSD must be frozen. Further - more, no funds may be transferred or made available, directly or indirectly, to the NSD (Article 15 paragraph 2 of the Ukraine Ordinance). Under the current SECO guidance (SECO FAQ, ver - sion of 30 June 2026, point 2.8.1), securities held sole - ly in custody via the NSD (but which do not belong to the NSD) are not affected by the asset freeze under Article 15 paragraph 1 of the Ukraine Ordinance. This interpretation differs from the one set out in the EU FAQ, subjecting any funds (including shares) and eco - nomic resources which were at some point held by and transferred from the NSD to an asset freeze upon their receipt. SECO appears to have deliberately distanced itself from the EU interpretation in its guidance. Conse - quently, under Swiss law, banks can consider that securities held or transferred via the NSD, but not belonging to the NSD, are not subject to an asset freeze according to Article 15 paragraph 1 of the Ukraine Ordinance, provided that no funds or eco - nomic resources are directly or indirectly made avail - able to the NSD (Article 15 paragraph 2 of the Ukraine Ordinance).
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