Sanctions 2025

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

Judgment of 9 January 2025 of the Federal Administrative Court (B-4738/2023) The case concerns an application to SECO by a Rus - sian national who has been listed in Annex 8 of the Ordinance since 4 March 2022, and also in the United Kingdom since 15 March 2022, to allow the appel - lant’s account-holding entity in Switzerland to make a payment of GBP155,000 in favour of his employee for outstanding wage claims. SECO rejected this request as it did not consider the conditions for granting an exceptional authorisation pursuant to Article 15 paragraph 5 litera a and b of the Ordinance (avoidance of hardship cases and fulfilment of existing contracts) to be met. The Federal Administrative Court emphasised the meaning and purpose of sanctions, namely “to exert collective pressure on a subject of international law in order (...) to change its attitude towards greater respect for international law (...)”, and the importance of avoiding circumvention. Contrary to the appellant’s assertion that the employ - ment contract was subject to English law, which is why the date of listing in Switzerland was not relevant, the Federal Administrative Court confirmed that the case fell within the scope of Swiss sanctions law due to the banking relationship in Switzerland (territorial scope). Therefore, the complainant’s listing in Annex 8 of the Ordinance on 4 March 2022, 6pm, was the relevant date for the legal examination of the exemp - tions. Given the simultaneous conclusion of the oral employ - ment contract with the listing in Switzerland and the conclusion of the written employment contract shortly before the listing in the UK, and given the connection between the appellant and the employee, the Federal Administrative Court considered whether there was a risk of circumvention. The appellant did not provide any conclusive evidence as to the exact date of the alleged oral conclusion of the contract. The Federal Administrative Court pointed out that it was up to the appellant to pro - vide evidence and arguments to prove that he met the requirements for the granting of a licence. In addition,

the appellant’s allegations proved to be contradictory. The Federal Administrative Court therefore confirmed that the substantive legal requirements for a licence under Article 15 paragraph 5 litera b of the Ukraine Ordinance were not met. The licence requirements for hardship were examined in relation to the employee and in relation to the appel - lant. The Federal Administrative Court considered the licence requirements not to be met due to a lack of sufficient evidence of the specific basic needs that were to be satisfied by the release of the GBP155,000. In addition, the employee’s contractually regulated activity as Head Family Office did not serve to satisfy existential basic needs. Judgments of 10 June 2025 of the Federal Administrative Court (B-6133/2024, B-6155/2024, B-6156/2024, B-6158/2024, B-6159/2024, B-6165/2024) These cases relate to an interim ruling issued by SECO to a financial institution, requesting that a number of its business relationships be blocked as a precaution - ary measure and that it submit a balance report for these relationships. SECO had evidence suggesting that the assets in question were under the control of individuals listed in Annex 8 to the Ukraine Ordinance. Given the imminent intention of the financial institution to dissolve the business relationships, SECO took this precautionary measure to ensure the subsequent rul - ing would be effective. This interim ruling was issued without a prior hearing of the parties involved, and the account holders were not notified until much later. Regarding the order to block the accounts, the Fed - eral Administrative Court ruled that the rights and obli - gations under Article 15 of the Ukraine Ordinance are already regulated by law, leaving no room for SECO to issue a freezing order. In this sense, Article 15 subjects financial institutions that hold economic resources controlled by designated persons to the correspond - ing penalty in case of breach. Therefore, the Federal Administrative Court decided that the interim ruling lacked the character of an order with regard to this request, constituting merely a reminder of the financial institution’s obligations under the Ukraine Ordinance. As such, no right to be heard applied, and it could not be appealed against.

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