Author: Lawyer Enrico Germano

Ever since the start of the war, perpetrated by the Russian Federation in the Ukraine from 24 February 2022, Switzerland, through the Federal Council, had joined the European Union’s sanctions against the Russian Federation. The Federal Ordinance that had instituted a series of measures in connection with the situation in Ukraine has since then been updated with the Ordinance of 4 March 2022, which is, as of today, still in force. Said Ordinance contains numerous Swiss measures and is legally binding¹. These measures are among the most diverse and concern most varied sectors, including those relating to goods, bans on the import of certain products, financial measures. Furthermore, the measures also affect the travel sector, including a take-off and landing prohibition for Russian airlines.

The travel restrictions, for example, directly affected not only the so-called oligarchs or politicians, but also every Russian citizen as well as European, who had absolutely nothing to do with the ongoing war, and who found themselves de facto prevented from travelling even for private or family reasons. One of the consequences caused by the restriction was the impossibility to travel to Russia, or the chance to do so bearing prohibitive terms, both in terms of exorbitant costs as well as time and routes, forcing travellers to use. For example, flights departing from Belgrade to fly to Moscow or, upon from a European airports with scheduled flights in Tallinn in Estonia, the travellers continued their travel by bus to St Petersburg and from there by train to Moscow.

In recent weeks, a number of Swiss politicians have also asked the certainly legitimate question of whether such sanctions have sufficient legal basis. Recently, the member of the National Council Lorenzo Quadri also raised the question concerning the risk of claims for compensation from those directly affected by the sanctions in an interpellation².

The issue is vast, uncertain and will have harsh consequences for the Swiss financial centre and the lack of Russian tourists and Russian executives who used to visit Swiss territory. As of today, no one is in a position to foresee the consequences, depending on factors of total uncertainty linked above all to the duration and scope of the current on-going war, with unpredictable scenarios also concerning its possible territorial extension. In fact, the average citizen in Switzerland is already witnessing a deterioration of his purchasing power, due to a gradual increase in many consumer goods and essentials. Moreover, this is only a first consequence.

Federal Councilor Guy Parmelin himself, currently head of the Federal Department of Economic Affairs, Education and Research, had to answer a series of questions on June 7th 2022, including those posed by the SVP group leader Thomas Aeschi, on whether the sanctions against the Russian Federation were appropriate, whether the Federal Council had set targets for itself and whether these targets had been met. The President of the Centre, Gerhard Pfister, asked Economic Affairs Councilor Guy Parmelin whether there had been any circumvention of the sanctions in place, alluding to Russian oligarch Andrei Melnitchenko allegedly selling a Cypriot trust to his wife³.

Yesterday, June 9th 2022, the National Council approved, by 136 votes to 53, a revision of the Federal Embargo Act, deciding that the Federal Council should be able to take or extend international sanctions autonomously. However, the National Council rejected two motions by the Left wing calling for the establishment of a task force, which would investigate the assets of Russian and Belorussian oligarchs in Switzerland. According to the RTS’website (Swiss Radio and Television), the Swiss banking association had estimated the assets of Russian oligarchs in Switzerland at about CHF 200 billion, but Switzerland had only frozen about CHF 6 billion of them. According to the left wing, the oligarchs’ assets must be found and frozen, but for his part, Federal Councilor Guy Parmelin has pointed out that a change in the law would be necessary, which does not currently exist⁴. In fact, there is a political clash between the Left wing, which considers that Switzerland is not doing enough to freeze Russian assets, and the Right wing- the FDP and SVP in particular – which considers that Swiss legislation already includes the means to find these funds. This political clash is constantly evolving, hand in hand with the evolution of the ongoing war, which is no longer only warlike and military in nature, but also economic-financial, ideological, propagandistic and ultimately also food-related.

¹ Website www.admin.ch, press releases, February 28th 2022
² Website www.ticinonews.ch, May 11th 2022

³ Website www.lematin.ch, June 7th 2022
⁴ Website www.Parlament.ch, and www.swissinfo.ch, June 7th 2022