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Sanctions in the RU-UA conflict – Update 3.0

14/04/22

Ukraine: Adoption of further EU sanctions against Russia and Belarus

On 8 April, the EU adopted further sanctions against Russia and certain restrictive measures against Belarus, considering Russia’s continuing military actions in the Ukraine.

This fifth package covers further measures in the areas of trade, finance and transport. These include bans on imports of coal and other goods that serve as important sources of revenue for Russia (such as wood, cement, seafood and vodka), and an export ban on kerosene and other goods that could contribute to strengthening Russia’s industrial capacity (including industrial robots and certain chemicals).

The EU also imposed a ban on the participation of Russian companies in public procurement, new financial sanctions, particularly regarding trusts, and a ban on financial support for Russian public institutions. Furthermore, the EU has imposed a ban on Russian and Belarusian road transport undertakings preventing them from transporting goods by road within the EU, and a ban on access to EU ports for Russian vessels.

For further information, please follow the link specifying the EU sanctions in more detail.

Situation in Switzerland

On 13 April, the Federal Council took the decision to adopt these new EU measures against Russia and Belarus with the exception of the transport bans, the adoption of which is not necessary for Switzerland due to its geographic location.

In addition, the Department of Economic Affairs, Education and Research (Wirtschaft, Bildung und Forschung, ‘WBF’) approved the sanctioning of a further 200 individuals and entities. This concerns individuals from the fields of politics, industry, communications/propaganda and the armed forces, as well as key oligarchs and their family members. Two of President Putin’s daughters are among the individuals newly sanctioned. Switzerland’s list of sanctions now fully mirrors that of the EU.

The relevant amendments to the ordinances on measures in relation to the situation in Ukraine and measures against Belarus are being prepared by the WBF. The amendments will come into force at 6pm on 13 April 2022.

Details at https://www.seco.admin.ch.

Enforcement of sanctions in Switzerland

The State Secretariat for Economic Affairs (SECO) is responsible for enforcing sanctions in the financial and goods sectors. It also works closely with the cantons.

In this context, SECO has determined that there were uncertainties and open questions in various cantons regarding the enforcement of international sanctions against Russia. Federal Councillor Guy Parmelin, Head of the Federal Department of Economic Affairs, Education and Research (Eidgenössisches Departement für Wirtschaft, Bildung und Forschung, ‘WBF’), then clarified the needs of the cantons in this extraordinary situation in an exchange with the Presidents of the Conference of Cantonal Finance Directors (kantonale Finanzdirektorinnen und Finanzdirektoren, ‘FDK’) and the Conference of Cantonal Governments (Kantonsregierungen ‘KdK’).

To this end, on 1 April 2022 SECO issued a leaflet informing the relevant cantonal authorities of their reporting obligations.

The new leaflet describes the legal basis, the most important terms, and the role of the cantons in enforcing international sanctions. In particular, it explains the reporting obligations of commercial register, land register and tax offices.

Action required and outlook

With this tranche, the already existing sanctions were extended again.

Economic operators should continuously check what effects the existing sanctions have on their business relationships, as misconduct will be punished with severe penalties.
Against the background of the constant expansion of sanctions, companies should check what influence the existing and planned restrictions will have, especially since the enacted regulations will come into force immediately. If necessary, business processes must be adjusted immediately.

In this context, we support you with the strategic definition of the derived requirements and their operational implementation.

Editorial

This newsletter reflects the status as of 13 April 2022. We would like to point out that the political situation is extremely dynamic and there may be short-term changes in the law.

As part of this newsletter, we will keep you informed of all further developments.

Your contact persons

Simeon L. Probst

Partner Customs & International Trade, Basel, PwC Switzerland

+41 58 792 53 51

Email

Katharina Scheiber

Senior Consultant Tax & Legal Services, PwC Switzerland

+41 58 792 5100

Email