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Sanctions in the RU-UA conflict - Update

08/03/22

Ukraine: Further trade and financial sanctions imposed against Russia

During the day on February 28, 2022 and March 2, 2022, the recently tightened EU sanctions were again expanded and new decisions and regulations on restrictive measures in view of actions that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine and actions by Russia destabilizing the situation in Ukraine.
We have attached the newsletter of our PwC colleagues of the EU, Germany under this link specifying of the EU sanctions in more detail.

Situation in Switzerland

On March 4, 2022 the Federal Council approved the total revision of the ordinance on measures connected with the situation in Ukraine, thereby adopting further packages of European Union sanctions against Russia. The newly adopted measures concern in particular certain goods and financial services. Switzerland’s list of sanctions has been extended accordingly. The measures include, among other things:

Goods measures

  • Prohibitions on dual-use goods, special military goods and goods for military and technological strengthening or for the development of the defense and security sector;
  • Ban on the import of firearms, ammunition, explosives, pyrotechnics and gunpowder from Russia and Ukraine;
  • Bans on aerospace goods;
  • Bans on oil refining goods.

Financial measures

  • Freezing of assets and prohibitions on making them available;
  • Reporting requirements for frozen assets;
  • Prohibition on the issue and dealing in transferable securities and money market instruments;
  • Ban on granting loans;
  • Ban on accepting deposits over CHF 100’000 from Russian citizens or from individuals and legal entities in Russia;
  • Obligation to report existing deposits of more than CHF 100’000;
  • Prohibitions related to transactions with the Central Bank of Russia;
  • Ban on the provision of specialized payment messaging services.

Measures concerning specified areas

  • Ban on the import of goods originating in the designated areas without a certificate of origin issued by the Ukrainian authorities;
  • Ban on the export of certain goods and related services to the designated areas;
  • Ban on financing, equity investments and certain services.

Further measures

  • Travel sanctions.

The implementation of these sanctions is compatible with Switzerland’s neutrality. Due consideration is being given to humanitarian activities.
Details under https://www.seco.admin.ch.

We are monitoring the current situation still with great concern, as there is a risk of significant further escalations. Sanctions in the form of import restrictions as well as export control restrictions can have an impact on your company.

Action required and outlook

Economic operators should continuously check what effects the existing sanctions have on their business, as misconduct will be punished with severe sanctions.

As already announced in the media, the new sanctions include the exclusion of some banks from the SWIFT message exchange for financial transactions. This is one of the most drastic sanctions that can be imposed with regard to an embargoed country. Due to the factual impossibility of making payments, it also restricts those business relationships that would have been possible in principle.
Therefore, check whether, and to what extent business with Russia or Russian parties is still possible. If necessary, the business processes must be adjusted immediately.

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

Editorial

This newsletter reflects the status as of March 04, 2022. We would like to point out that the 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