Sanctions 2025

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

1. Trends and Overview 1.1 Sanctions Market

The challenge for many companies is to understand new sanctions measures and implement changes to their businesses in an informed manner. The lack of sufficiently comprehensive guidance at an EU and Swiss level adds another level of complexity. Many companies are also wrestling with whether to continue having business ties with Russia or wheth - er to pull out entirely. This decision-making process is also informed by risks from a Russian counter- sanctions perspective, such as the potential risk of nationalisation of a Western business by the Russian government, which has already happened. The increased focus by regulators on circumvention means that it is all the more essential for companies to put in place comprehensive sanctions compliance measures. The increased focus on circumvention is further evidenced by being a main area of focus in the latest sanctions packages – ie, the 15th, 16th and 17th packages. Apart from the specific due diligence obligations concerning the supply of so-called Common High Priority Items introduced in the EU’s 14th sanctions package, whereby Switzerland has explicitly chosen not to implement these procedures, neither SECO nor the European Commission have issued further guid - ance on due diligence requirements that companies are expected to comply with. Broadly speaking, the level of due diligence should be informed by a risk- based approach. Companies should have effective screening systems commensurate to the nature, size and risk of their business. Counterparty screening, including involved payment providers, against the EU, Swiss, US and UK sanctions lists has become stand - ard practice for companies to enable them to reduce their sanctions risks. More broadly, companies should conduct an assess - ment of their own internal compliance function to ensure that it has been allotted appropriate resources to implement the requisite sanctions due diligence. In addition, a company should consider whether it is appropriate, in light of internal resources and the sanctions compliance risks posed by counterparties with a Russia or Belarus nexus, to limit the volume of

Over three years after the launch of the Ukraine inva - sion, companies are still grappling with the novel sanctions regulatory landscape. Throughout the war, sanctions measures have increased in complexity. The type and scope of sanctions imposed against Russia go beyond measures previously taken against other countries. The multitude of sanctions regimes, albeit their prin - ciples being somewhat co-ordinated by the G7, also gives rise to a number of challenges. Businesses often struggle to understand which sanctions regimes are applicable and often regimes are simultaneously applicable. Assessing which sanctions regime applies is the first step companies need to take in order to ensure compliance. Some sanctions regimes, such as US sanctions, are notoriously extraterritorial and can apply even in the absence of US jurisdictional nexus. Meanwhile, UK (post Brexit) and EU (and hence also Swiss) sanctions have even become more compre - hensive in certain areas (eg, with the service and soft - ware ban). Under the sanctions imposed against Russia and Belarus, there is no per se prohibition on conducting business in either Russia or Belarus – ie, there is no trade embargo. Nevertheless, doing so raises signifi - cant sanctions risks that must be carefully assessed in advance of any such business transactions, and in the wider context of the purpose underlying these sanctions. Many measures have been introduced in an attempt to cut Russia off from the global financial markets, for example by designating a vast number of Russian financial institutions under sanction. The sanctions imposed on Belarus were designed with similar purposes in mind and have meanwhile also been further strengthened. 1.2 Key Trends Companies and financial institutions are having to constantly adapt to new sanctions measures. The last 12 months alone have seen the implementation of four new waves of EU sanctions measures – the 17th package was implemented on 20 May 2025 and the 18th package announced on 18 July 2025.

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