SWITZERLAND Trends and Developments Contributed by: Philippe Reich, Meera Rolaz, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG
ogy, financing or services). In its announcement of the implementation of the 14th package on 16 October 2024, the Swiss Federal Council stated that the Swiss government chose not to introduce a similar obliga - tion in the Ukraine Ordinance, instead relying on the existing legal framework that allows prosecution of companies circumventing sanctions via subsidiaries, especially when directed or instructed from within Switzerland. The Swiss government further empha - sised the effectiveness of the “Swiss” approach by citing ongoing investigations by SECO into such vio - lations. Approach Towards Russia Exit Licences With the constantly expanding sanctions framework in Switzerland, in particular as far as sanctions against the Russian Federation are concerned, an increase in companies considering to cease activities in the Russian Federation and to divest from the Russian market has been observed. Such exit transactions, for example the sale of a Russian subsidiary to its Russian management (ie, management buy-out), usu - ally include the transfer of restricted assets to a Rus - sian party. Consequently, the transaction is subject to restrictions under the Ukraine Ordinance and thus requires a licence from SECO in order to be com - pleted. The Ukraine Ordinance includes two licensing grounds for exit purposes, Article 30a paragraph 1 for transfers, etc, of goods subject to product-related restrictions, and Article 30c paragraph 1 covering the provision, etc, of services and software subject to the so-called services and software ban (Article 28e of the Ukraine Ordinance). According to Article 30a paragraph 1 of the Ukraine Ordinance, SECO may grant authorisations until 31 December 2025 from various product-related restric - tions concerning the sale, supply, etc, of goods and technologies listed in the relevant annexes as well as the sale, licensing or other transfer of intellec - tual property rights or trade secrets related to those goods, provided that: (i) the aforementioned activities are strictly necessary for the withdrawal of invest - ments from the Russian Federation or the termina- tion of business activities in the Russian Federation; (ii) the goods and technologies are, inter alia, owned
by a legal person incorporated under Swiss law or the law of an EEA member state; and (iii) the goods and technologies concerned were physically present in the Russian Federation before the respective pro - hibitions entered into force in respect of those goods and technologies. This deadline was extended from 31 December 2024 to 31 December 2025 under the Swiss Federal Coun - cil’s implementation of the EU’s 15th sanctions pack - age on 12 February 2025. Specifically, the deadline was extended in line with the – then – latest EU sanc - tions package and the respective extension of the rel - evant deadline in Article 12b paragraph 1 of Regula - tion (EU) 833/2014. The above-mentioned extension in the EU entered into force on 16 December 2024. Article 30c paragraph 1 of the Ukraine Ordinance states that SECO may grant authorisations from the prohibitions on services and software under Article 28e of the Ukraine Ordinance until 31 December 2025 after consulting the Federal Departments for Foreign Affairs and Finance, provided that: (i) the services or software are strictly necessary for the withdrawal of investments from the Russian Federation or the termi- nation of business activities in the Russian Federation; and (ii) the services or software are provided exclu - sively for the benefit of the legal entities, organisa - tions or institutions resulting from the withdrawal of investments. Similarly, the deadline according to Article 30c para - graph 1 of the Ukraine Ordinance was extended fol - lowing the implementation of the – then – latest EU sanctions package and the respective extension of the relevant deadline in Article 12b paragraph 2a of Regulation (EU) 833/2014 to 31 December 2024. Lastly, SECO has not (and likely will not) issue general guidance on whether share deals in an exit constel - lation, under which controlled items are being trans - ferred to a Russian party, require an (exit) licence. Rather, SECO maintains its position that it will con - duct a case-by-case assessment on the basis of the circumstances of the specific case. It is strongly suggested that one involves an experienced Swiss sanctions practitioner for the preparation of such sub -
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