Sanctions 2025

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

even the settlement by payment to the Regional Debt Enforcement Office would fall under the prohibition of Article 15 paragraph 2 of the Ukraine Ordinance, as the respondent would have a corresponding claim for payment against the debt enforcement office (see consideration 3.2). The authors expect that the continuing extension of the Swiss sanctions framework combined with result - ing cases of (alleged) impossibility to fulfil contractual obligations may lead to further court decisions in the near future. It will be of particular importance to under - stand how the courts involved will approach the ele - ment of burden of proof which must be borne by the party arguing in favour of the impossibility to perform under the contractual agreement. 6.2 Enforcement The authors are currently not aware of any Swiss court rulings explicitly dealing with the enforcement of judgments on sanctions-based issues. However, it is expected that this topic will be raised in light of international arbitration and interim (counter-)meas - ures seeking international enforcement. In accordance with Article 2 paragraph 1 EmbA, the Federal Council is responsible for enacting restrictive measures, including designations. With regard to UN sanctions, the Federal Council automatically adopts the designations originating from the corresponding UN Sanctions Committee established by the relevant UN Security Council Resolution, whereas it will have a margin of appreciation in the adoption of designation decisions originating, for example, in the EU, where no automatism applies. However, under the Russia sanc - tions, all EU designations have been implemented by Switzerland, usually within days. 7.2 Scope of Designation Indirect Designations In addition to persons expressly listed in the annexes to the respective sanctions ordinances, non-designat - ed third parties may qualify as designated parties if 7. Designation, Compliance and Circumvention 7.1 Executive Body

the designated person is determined to own or have control over them. Article 15 of the Ukraine Ordinance is a good example of the meaning and impact of “indirect designation”. This provision imposes a freeze of the funds and eco - nomic resources owned or directly or indirectly con - trolled by individuals and entities listed in Annex 8 to the Ukraine Ordinance, individuals and entities acting on behalf of or on the instructions of the latter, as well as entities owned or controlled by these. Thus, this provision subjects to asset freeze not only those designated in Annex 8, but also (i) those acting on behalf of or on the instructions of those designated, and (ii) those entities owned or controlled by those designated. Article 18 of the Ukraine Ordinance provides another example. It restricts the provision of certain services in connection with securities and money market instru - ments with certain maturities and issued after certain dates. This provision subjects to this prohibition not only those designated in Annex 9, but also (i) those foreign entities more than 50% owned by those des - ignated, and (ii) those acting on behalf of or on the instructions of those designated. Concept of Ownership SECO FAQ, point 1.8, defines “ownership” as the fact that the designated person “directly or indirectly holds 50% or more of the ownership shares in a company or an organization”. As provided in the judgment of the Federal Administrative Court of 7 November 2023 (B-547/2023) referred to in 3.1 Significant Court Deci - sions or Legal Developments , “the Ukraine Ordinance does not define the cases in which an ownership or control relationship relevant under sanctions law is to be assumed. Swiss case law links this to principles of control and domination under company law and of beneficial ownership” (consideration 4.2). Switzerland follows therefore the same definition of “ownership” as the EU (see EU Best Practices, paragraph 63). SECO also follows an “aggregated” concept of “own - ership”, taking into account the ownership quotas of all designated persons involved in each case (see SECO FAQ, point 1.8), again in alignment with the EU.

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