Author: Lawyer Enrico Germano

Like its predecessors, the Agreement on the Swiss banks’ code of conduct with regard to the exercise of due diligence of 2020 (CDB 20) stipulates in Article 36 that banks may waive the verification of beneficial ownership if a lawyer or notary authorised to practise in Switzerland confirms in writing (Form R) that he or she is not the beneficial owner, that he is subject as a lawyer or notary to the relevant legislation, that he is subject to the statutory professional secrecy (Article 321 of the Swiss Criminal Code – SCC) with regard to the assets deposited, and that the account serves exclusively for the (typical) activity of a lawyer or notary.

Abusive use by an affiliate of an account opened in his own name in accordance with Form R must be avoided at all costs, even if the bank concerned does not take issue with this or even encourages the use of an R-account. It is the affiliate’s responsibility not to sign a Form R (or use an existing Form R) in a situation not covered by professional confidentiality. Otherwise, he may be guilty of forgery of documents under Article 251 SCC and his organisation may be deemed to be inadequate within the meaning of Article 13 of the Regulation of the Self-Regulating Organisation of the Swiss Bar Association and the Swiss Notary Association of 1 April 2023 – SRO FSA/FSN.

On 29 June 2022, the Federal Council specified that the obligation to declare in accordance with Art. 16 of the Ordinance of 4 March 2022 instituting measures in connection with the situation in Ukraine (O-Ukraine) is inapplicable to lawyers in the context of their typical activity 1 . This position of the Federal Council of 29 June 2022 followed an interpellation of the Green Party National Councillor Raphael Mahaim of 11 May 2022 2 . More specifically, the Federal Council had stated:

« A distinction must be made between the different activities performed by lawyers, i.e. between their profession-specific activities and other activities, such as asset management or mandates on boards of directors. According to the Federal Supreme Court, only the specific professional activity of a lawyer is protected by professional confidentiality, i.e. drafting legal documents, assisting or representing a person before an administrative or judicial authority, and providing legal advice (BGE 147 IV 385, consid. 2.2). A breach of professional confidentiality is an offence under Article 321 of the Criminal Code (SCC). Lawyers are not permitted to pass on information to third parties in the exercise of their specific professional activity, under penalty of criminal sanctions. However, according to Article 321 paragraph 3 SCC, the provisions of federal legislation that stipulate, for example, the right to notify an authority or the obligation to give information to an authority (cf. Art. 14 SCC) remain unaffected. The Federal Council is of the opinion that, in the exercise of their specific professional activity, lawyers are not obliged to declare assets or economic resources subject to the freeze in Article 16 of the Ordinance of 4 March 2022 instituting measures in connection with the situation in Ukraine (SR 946.231.176.72; hereinafter Ordinance in connection with Ukraine).
However, in the absence of administrative precedents or case law on this specific case, it is up to the competent judicial authorities to clarify the matter. Lawyers carrying out activities that are not subject to professional secrecy must in any
case comply with the notification obligation laid down in Article 16 para. 2 of the Ordinance in connection with Ukraine.
The State Secretariat for Economic Affairs (SECO) has received some reports from lawyers in the context of their fiduciary activity. In most cases, it is the banks that freeze assets and declare them, as lawyers are generally unable to freeze them themselves. Lawyers’ declarations are usually in addition to those of other parties.

Lawyers strive not to favour the violation of sanctions. Otherwise, they would violate their professional obligations and be liable to criminal penalties. The penalties for violating the sanctions regime are laid down in Articles 9 and 10 of the Federal Act on the Implementation of International Sanctions – Embargos Act (EmbA, SR 946.231). The Federal Council expects Swiss companies to comply with the Swiss legal system, including sanctions. For example, if the Swiss authorities receive information about assets that should have been frozen, they will of course investigate. Violations are punished according to the EmbA ».

A recent article in the Swiss Lawyers’ Magazine of February 2023 (RA 2-2023) confirmed that the Federal Council’s position was legitimate, considering that Art. 16 of the Ordinance in connection with Ukraine was inapplicable to lawyers in the context of their typical activities. Indeed, this ordinance cannot justify a derogation from the professional confidentiality enshrined in Art. 321 SCC and Art. 13 of the Federal Act on the Free Movement of Lawyers of 23 June 2000 (Lawyers Act, FMLA). The professional confidentiality of lawyers is first and foremost a right of the defendant and is a right of constitutional and conventional rank that results indirectly from the protection of the private sphere under Art. 13 of the Federal Constitution of the Swiss Confederation and Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). It is a pillar of the lawyer’s legitimacy and an indispensable component of the proper functioning of the rule of law 3 .

1 RA 2-2023, pag. 63 and following


3 RA 2-2023, pag. 63 and following