Author: Enrico Germano
On 10 June 2022, an article came out on the website Swissinfo.ch, concerning the effects of the sanctions against Russia on Swiss luxury goods1. Effects that were more than predictable and would occur eventually, especially in view of Switzerland’s compliance with the EU sanctions against the Russian Federation, as I previously touched on my article of 10 June 2022.
I would like to mention that the extensive and articulated Federal Ordinance Establishing Measures in Relation to the Situation in Ukraine of 4 March 2022 (Status 10 June 2022)2 states in its Article 14b that “the sale, supply, export, transport and transit of the luxury goods listed in Annex 18 to persons, companies or organizations in or for use in the Russian Federation are prohibited”.
Said Annex 18 of the Ordinance is very detailed and varied, covering the most diverse items, applying to luxury goods worth more than CHF 300. -per item and ranging, in a list that is intended to be indicative and not exhaustive. The list entails articles such as caviar, truffles, preparations for soups or broths, sparkling and other wines, perfumes as well as beauty or make-up products including pre-shave, shaving and after-shave. Also included are trunks, suitcases and briefcases and wallets, in addition to clothing items such as coats, jackets, capes, suits, trousers, shirts, underwear, pajamas, t-shirts, jumpers, tracksuits, gloves, clothing accessories for small children, bras and corsets. The sanction affects also handkerchiefs, pocket handkerchiefs, scarves ties, footwear, slippers, hats, baby nappies, rugs, diamonds and precious stones, as well as silver and gold, cutlery, ladles, cake shovels, sabers, swords, bayonets and other bladed weapons, pottery and other ceramic articles, glass, mirrors, lamps and non-electric lighting fixtures, tables, floor fans, refrigerators and freezer-cabinets, bathroom scales as well as baby scales, dishwashers to office offset printing machines and appliances such as tumble dryers, sewing machines, hoovers, hairdryers, microwave, ovens, toasters, tires, vehicle rear-view mirrors and windscreen wipers, wristwatches, wristbands and bracelets, pianos and other musical instruments, tennis rackets, tennis balls, roller skates, fishing rods and playing cards.
The examination of this list, which has been summarized for the sake of transparency, raises many questions as to whether, for example, soups or broths, baby nappies, pants, cake stirrers and clothing for small children, baby weights, as well as spoons and forks or roller skates or playing cards can be considered luxury goods and whether their inclusion on the list would affect the measures taken in connection with the situation in Ukraine.
With regard to Russian citizens, of whom there are currently about 16,500 in Switzerland, the embassy of the Russian Federation in Berne pointed out that if Russian and Swiss dual citizens were also included, then the figure could almost double3. In addition, the Swiss dealers also told Swissinfo.ch “the 100,000 euro (approx. 105,000 Swiss francs) limit on cash transfers by Russian citizens, imposed by the EU and also taken over by Switzerland, still allows commercial transactions up to this amount”. Following the EU sanctions, Swiss banks can no longer accept deposits of more than EUR 100,000 from Russian citizens who are not residing in Switzerland4. Among other things, on 7 June 2022, the Minister of the Economy Guy Parmelin, during the press conference held at the National Council, clarified that “at present it is not possible to measure the effects of the Swiss sanctions, reaffirming that the purpose of these sanctions is to bring the current war to an end as soon as possible and that if the EU were to lift these sanctions, Switzerland would do so as well”5.
Among the Swiss’ Cantons, Geneva has been concerned about its economy since the beginning of the war. A work group with representatives of the various economic sectors and State Councilor Fabienne Fischer had been set up in March 2022 to assess and anticipate the consequences in view of the important financial center, from which around 80% of Russian raw materials are traded6. A few days ago, on 10 June 2022, the Swiss-French website 24heures.ch reported how Swiss free ports, particularly those in Geneva, which are notorious for storing non-cleared goods in transit, were under pressure from the Federal Customs and Border Security Office, which began carrying out inspections with the aim of ascertaining the origin of the goods and whether they were connected to persons affected by the current sanctions7. One thing is certain: these sanctions are having an increasing and direct repercussion on Swiss companies and their import-export business, who are now unable to trade as they did before the start of the war. However, the consequences are not only for Swiss manufacturers and for suppliers of luxury goods, but also – a lesser-known fact – for the employees of the sanctioned companies. In fact the violation of the ban is severely punished both under the Ordinance instituting Measures in connection with the Situation in Ukraine of 4 March 2022, in particular by Article 15 which stipulates the freezing of assets and economic resources, as well as the Embargo Law of 22 March 2022, which provides for penal sanctions with imprisonment of up to one year or a fine of up to CHF 500,000, with imprisonment of up to five years in serious cases and the possibility of a combination of imprisonment and a fine of up to CHF 1 million.
1 www.swissinfo, 10.06.2022, «L’effetto delle sanzioni contro la Russia sul santuario del lusso svizzero»
2 Federal Ordinance Establishing Measures in Relation to the Situation in Ukraine of 4 March 2022
3 www.swissinfo, 10.06.2022, «L’effetto delle sanzioni contro la Russia sul santuario del lusso svizzero»
4 www.swissinfo, 10.06.2022, «L’effetto delle sanzioni contro la Russia sul santuario del lusso svizzero»
5 www.Parlament.ch, ATS, June 7th 2022
6 Tribune de Genève, 10 mars 2022, Marc Bretton
7 www.24heures.ch, 10 giugno 2022, «La traque des oligarques met la pression sur les ports francs», Lise Bailat