Sanctions 2025

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

mission to SECO for SECO to be able to assess the requirement for an exit licence. Implementation of Services and Software Ban The implementation of the EU’s services and software ban is a good example of SECO’s tendency to adopt a more pragmatic approach than the EU (so-called “Swiss finish”). In the 12th sanctions package, the EU abolished the so-called group or partner exception and introduced a licensing requirement which came into force on 30 September 2024 with regard to the provision of services to entities in Russia whose par - ent company is established in the EU. Authorities across member states, however, have been taking a different approach on such licensing requirement. Whilst regulators like the Federal Office for Economic Affairs and Export Control in Germany foresee an open general licence system, other regulators like the Direction Générale du Trésor in France require a more formal licensing process as intended by the European Commission. Although Switzerland usually mirrors the EU’s licens - ing provisions, it did not do so on this occasion. Instead, the exception will continue to apply in Swit - zerland where services or software are destined for the exclusive use of legal entities, companies or organi - sations established in Russia that are owned or con - trolled solely or jointly by legal entities, companies or organisations incorporated or registered under Swiss law, the law of an EEA member state or the law of a partner country. Article 28e paragraph 6 of the Ukraine Ordinance stipulates a notification duty for services or software provided under Article 28e paragraph 2 let. a of the Ukraine Ordinance by (as at the time of writing) 31 July 2024, and thereafter every six months. This means that the group exception continues to be avail - able in Switzerland, subject to a notification duty. The first three deadlines for notification have passed (31 July 2024, 31 January 2025 and 31 July 2025), with the next one coming up on 31 January 2026. SECO designed the corresponding notification form to gain information (every six months) on the following: • how many Swiss-based companies continue to provide;

• what type of (otherwise banned) services or soft - ware to Russian companies (qualifying under the group exception); and • what approximate (objective) value “as if” in a third-party context (ie, disregarding intra-group valuation). With regard to the last point above, in the notification form, SECO provides that, if the value is based on wage costs, average values are accepted (eg, average value in the list of gross earned income per year of full- time employees by occupational status). Wage costs are just one way of quantifying the value of a service and other alternatives are also possible. Companies continue to grapple with how to value the services they continue to provide to Russia. The valua - tion of services is particularly problematic where com - panies provide intra-group services free of charge. In such cases, and in the absence of specific guidance from SECO, it is up to the companies to come up with and explain the best suitable objective valuation (eg, at-arm’s-length consideration, number of FTE provid - ing/receiving services), whereby the notification form provides by example a calculation method in case of salary cost. Trends in the Financial Sector The financial services industry is a sector of crucial importance for Switzerland. SECO has therefore tread a fine line between wholesale implementation of the EU sanctions measures as well as ensuring a more pragmatic approach to sanctions. This has led to a significant discrepancy between how Swiss and EU sanctions are applied in this area in practice. Although Switzerland essentially copied the sanctions measures imposed by the EU in its Ukraine Ordinance, it deviated significantly in the SECO guidance (ie, the SECO FAQ). For instance, Switzerland broadened the range of Russian parties that are exempt from the application of the deposit restrictions under Article 20 of the Ukraine Ordinance, the restriction on providing management services to trusts under Article 28d of the Ukraine Ordinance and the restriction on sales of transferable securities to Russian parties under Article 23 of the Ukraine Ordinance.

188 CHAMBERS.COM