Geneva
Russia’s invasion of Ukraine has put Switzerland’s much-vaunted neutrality to the test and along with it, the country’s traditional role as international intermediary and reputation as a safe haven for the assets of Russia’s richest and most powerful.
The Swiss executive branch stopped short of announcing unilateral sanctions against Russian interests after Moscow’s blistering military action in Ukraine. Instead, the Federal Council opted to fall in line with the European Union and pledge that Russian individuals and companies hit with EU sanctions won’t be able to evade them in Switzerland, which is not one of the EU’s 27 member states.
The government said Friday that financial intermediaries in Switzerland were now banned from starting new business relationships with 363 Russian people and four Russian companies. Any existing business must be reported to the Swiss economic affairs secretariat. Further steps are under consideration.
While hardly a crackdown compared to other Western sanctions aimed at punishing Moscow for its invasion of Ukraine, the impact could be felt. The rich Alpine nation has been the biggest recipient of transactions by Russian private individuals ahead of Britain, Spain, Luxembourg and the United States, according to a report compiled by the Swiss Embassy in Moscow.
Switzerland has for years been by far the most important destination worldwide for rich Russians to manage their wealth, the report said, adding that net transfers of Russian taxpayers to Switzerland totaled 2.5 billion in 2020. The Swiss news agency SDA-ATS reported net transfers of 1.8 billion in the first half of 2021.
Federal Councillor Guy Parmelin, the head of the federal economic affairs department, noted that Switzerland was bound to follow U.N. sanctions but could decide whether to follow EU sanctions based on criteria such as foreign policy and legal aspects including legislation that has enshrined neutrality into Swiss law.
Swiss authorities are in essence extending measures set up in 2014 after Russia’s takeover of Crimea, in which they also sought to ensure that EU sanctions were not dodged in Switzerland, to hundreds more people and businesses but going further.
Switzerland is thus taking a tougher line with regard to Russia, Parmelin told reporters in Bern, the capital.
According to the Bank of International Settlements, Russian deposits in Swiss financial institutions totaled the equivalent of nearly 11 billion at the end of the third quarter last year. That represented about 30 percent of the total Russian deposits overseas of nearly 36 billion, according to BIS figures. (AP)
