SWITZERLAND Law and Practice Contributed by: Philippe Reich, Meera Rolaz, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG
transactional activity with these countries and to not further expand such business ties. 1.3 Key Industries Sanctions have an impact on almost all relevant sec - tors of the Swiss economy. The Swiss (exporting) manufacturing and financial sectors, but also the trad - ing, energy and even healthcare, luxury and consumer goods sectors have been particularly affected. SECO’s pragmatic implementation of EU sanctions measures in the Swiss Ordinance on measures in con - nection with the situation in Ukraine (“Ukraine Ordi - nance”) has meant that companies that are purely subject to Swiss jurisdiction are granted a greater level of flexibility than companies that are subject to EU law. SECO has – eg, at times deviated in its implementation of EU financial sanctions by adopting broader exemptions to the restrictions on deposits, trusts and the sale of transferable securities. SECO has also limited the scope of the deposit restrictions. Although many banks are also subject to other sanc - tions regimes and therefore tend to apply the stricter EU measures, SECO is trying to give financial institu - tions greater leeway. However, there are instances where SECO has adopt - ed a very restrictive interpretation of exceptions and licensing exemptions, even for companies operating in the healthcare industry, which has traditionally been impacted in a minimal way by sanctions. SECO tends to interpret restrictively the scope of the exemption for goods and services intended for “medical or pharma - ceutical purposes” under Article 6 paragraph 1 let. b or the licensing ground of “medical or pharmaceutical purposes with an end use of a non-military character” under Article 11a paragraph 4 let. a of the Ukraine Ordinance. In these cases, SECO is concerned with the risk of diversion and requires operators to have oversight over the supply chain. SECO typically requires evidence of a robust supply chain traceability system and identification of the 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 common examples of the type of sanctions contained therein, apart from those which form part of the traditional sanctions toolkit (namely prohibiting the sale, supply, etc, of war material and other military items): • Prohibition on the sale, supply, export, etc, of dual-use goods and on ancillary services (namely Russia, Belarus, Iran). • Prohibition on the sale, supply, export, etc, of equipment, technology and software that can be used to monitor and intercept internet and tel - ephone traffic and on ancillary services (eg, Iran, Myanmar, Syria). • Prohibition on the sale, supply, export, etc, of certain luxury goods and on ancillary services (eg, Russia, Syria, North Korea). • Prohibition on the sale, supply, export, etc, or on the purchase, import, etc, of certain precious metals and on ancillary services (eg, Russia, Syria, North Korea). • Prohibition on the provision of certain services or software and on ancillary services (namely Russia). • 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 also 5. Trade and Export Restrictions .
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