SWITZERLAND Trends and Developments Contributed by: Philippe Reich, Meera Rolaz, Kaspar Projer, Samantha Salsench and Anna Zellweger, Baker McKenzie Switzerland AG
Based on the SECO FAQ, nationals of Monaco, Andorra or the United Kingdom and natural persons who hold a temporary or permanent residence permit in Monaco, Andorra, the United Kingdom, Gibraltar, the Isle of Man or the Channel Islands are not subject to the prohibition set out in Articles 20, 23 and 28d, thus deviating from EU sanctions. The broadening of the exemption under Swiss law has provided greater flexibility to Swiss banks as opposed to banks which are purely subject to EU law. Another example of SECO’s flexibility in the financial sanc - tions space is the interpretation of National Settlement Depository (NSD) as a designated party. The NSD was listed as a designated entity under Arti - cle 15 paragraph 1 and Article 29 paragraph 1 of the Ukraine Ordinance. This means that all assets of or under the control of the NSD must be frozen from a Swiss sanctions perspective. Furthermore, no funds may be transferred or made available, directly or indirectly, to the NSD (Article 15 paragraph 2 of the Ukraine Ordinance). Under the current SECO guidance (SECO FAQ, ver - sion of 22 May 2025, point 2.6.1), securities held sole - ly in custody via the NSD (but which do not belong to the NSD) are not affected by the asset freeze under Article 15 paragraph 1 of the Ukraine Ordinance. This interpretation differs from the one set out in the EU FAQs, subjecting any funds (including shares) and economic resources which were at some point held by and transferred from the NSD to an asset freeze upon their receipt.
SECO appears to have deliberately distanced itself from the EU interpretation in its guidance. Conse - quently, under Swiss law, banks can consider that securities held or transferred via the NSD, but not belonging to the NSD, are not subject to an asset freeze according to Article 15 paragraph 1 of the Ukraine Ordinance, provided that no funds or eco - nomic resources are directly or indirectly made avail - able to the NSD (Article 15 paragraph 2 of the Ukraine Ordinance). In light of the lack of consistency between applicable sanctions regimes and the extensive nature of sanc - tions measures, financial institutions are required to implement robust compliance policies and proce - dures. Regulators are increasingly scrutinising finan - cial institutions and expect them to screen parties that are involved in relevant transactions, and they must also ensure that individual transactions in which they are involved do not breach applicable sanctions (for example, by involving trading in restricted products). The Wolfsberg Guidance on Sanctions Screening provides helpful guidelines on applying a pragmat - ic approach to sanctions screening. The Wolfsberg Group consists of the following financial institu - tions: Banco Santander, Bank of America, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan Chase, MUFG Bank, Société Générale, Standard Chartered Bank and UBS.
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