Switzerland implements the remaining measures of the 8th EU sanctions package | White & Case LLP
In response to the ongoing conflict in Ukraine, Switzerland has expanded existing sanctions and taken new measures. The latest amendment to the Regulation on measures related to the situation in Ukraine (the “Regulation”1) came into force on November 23, 2022 at 18:00 CET and has implemented the remaining measures of the eighth EU sanctions package. In this notice we summarize the new sanctions and changes to the regulation.
Ban on sea transport of crude oil and petroleum products from Russia to third countries with price caps
Switzerland had already introduced a ban on the direct or indirect purchase, import or transfer of crude oil or petroleum products originating in or exported from Russia to Switzerland.
Switzerland has now introduced the ban on sea transport of petroleum and petroleum products (and related technical assistance, brokering services, financing or financial support for this sea transport) to third countries of crude oil (from December 5, 2022) or petroleum products (as of February 5, 2023) that come from or are exported from Russia2. These restrictions do not apply if the relevant crude oil or petroleum products are purchased at or below a predetermined price cap. The price cap has not yet been set3.
There are also new (non-licensing) exemptions that apply to the restrictions on the import and transportation of Russian crude oil and petroleum products. An exception is, for example, the transport of crude oil and petroleum products in transit through Russia, provided that the owner of the products is not Russian4. Switzerland can also grant a further exemption for the transport (or related services) of certain crude oils and petroleum products to third countries5. On this basis, from December 5, 2022 to June 5, 2023, Switzerland exempted the ship transport of certain crude oil products of CN 2709 00 with condensate from the Sakhalin 2 project in Russia to Japan.6
Prohibition of architectural and engineering services, out-of-court legal advice and IT consulting services for Russian companies and the Russian government; Ban from serving on supervisory boards of listed Russian SOEs
Already, accounting, auditing, bookkeeping, tax advice, business and management consulting or public relations may not be provided directly or indirectly to Russian companies and the government of Russia. This is now expanded Architectural and engineering services, non-contentious legal advice and IT Consulting Services.7
An exception to this prohibition are services provided exclusively to Russian companies wholly or jointly owned or controlled by companies based in the EEA, Switzerland or the United Kingdom. Also exempt from the ban are services necessary to ensure access to justice, including administrative and arbitration proceedings, in Switzerland, the EEA or the UK. Also excluded are services necessary for health emergencies, to prevent or mitigate an event that may have serious and significant impact on human health and safety or the environment, or in response to natural disasters. In addition, services required for software updates for non-military purposes and for a non-military end user are also excluded.8th
Exceptions (subject to prior approval) also exist for services necessary for humanitarian purposes, civil society activities promoting democracy, human rights or the rule of law in Russia, the activities of certain diplomatic and consular representations of Switzerland, its partner countries and NGOs in Russia and securing critical energy supply and infrastructure.9
Other products subject to the import ban: iron and steel products, jet fuel and goods that generate significant revenues for Russia
The current import ban for iron and steel is extended to all products that fall under the Swiss tariff headings “Iron and unalloyed steel” (tariff headings 7206 to 7217), “Stainless steel” (tariff headings 7218 to 7223), “Other” and alloyed steel; Hollow boring bars, of alloyed or unalloyed steel” (tariff headings 7224 to 7229) and “Articles of cast iron or steel” (tariff heading 73)10.
The current import ban on jet fuel and goods that generate significant revenue for Russia has been extended. Restricted products include, but are not limited to, (i) cigars and cigarettes, (ii) chemicals, (iii) cosmetics, (iv) plastic raw materials and products, (v) paper, (vi) machine parts and electric motors and generators, (vii) electronic integrated circuits and their parts. An exemption (subject to prior approval) exists for the construction, operation, maintenance, fueling and reprocessing, and safety of civilian nuclear capacities11and the continuation of the design, construction and commissioning necessary for the completion of civil nuclear facilities12the supply of raw materials for the production of medical radioisotopes and similar medical applications or of critical technology for environmental radiation monitoring and for civil nuclear cooperation, in particular in the field of research and development13.
crypto assets
There is now a total ban on providing wallet, account or custody services for crypto assets to Russian nationals, residents and legal entities, removing the previous CHF 10,000 threshold.14
Arms embargo against Russia and Ukraine
In addition to the measures of the eighth EU sanctions package, the Swiss government has now explicitly included an arms embargo against Russia in the regulation by deleting Article 2 and replacing it with Article 2a. For reasons of Swiss neutrality, the embargo is partially extended to the Ukraine.
So far, the arms embargo in Switzerland has largely been implemented on the basis of the existing war material and goods control legislation. With the adoption of this new article, the embargo is now explicitly included in the regulationfifteen.
Article 2a(1) of the Decree prohibits the sale, supply, export and transit of any military material, including weapons and ammunition, military vehicles and equipment, paramilitary equipment, and their accessories and spare parts, to or for use in the Russian Federation or Ukraine.
This prohibition does not apply to the temporary export of protective clothing, including bulletproof vests and helmets, by UN, EU or Swiss personnel or members of the media and humanitarian workers for personal use16. These prohibitions also do not apply to goods and services requested by Switzerland as support by the Organization for the Prohibition of Chemical Weapons within the meaning of Article X Paragraph 7 of the Chemical Weapons Convention of January 13, 1993 (AS 1998 335).17.
In addition, the purchase, acquisition, importation and transit of any type of military equipment, including weapons and ammunition, military vehicles and equipment, paramilitary equipment and their accessories and spare parts, originating or coming from the Russian Federation is prohibited18.
None of the aforementioned prohibitions apply to spare parts and services that are required for the maintenance, repair and safeguarding of existing military capabilities in Switzerland or in a member state of the European Economic Area (EEA).19.
Exceptions (subject to prior approval by SECO and the FDFA) are possible for the following substances if they are intended for use in launchers of European carriers of launch systems, for use in launchers of European space programs or for refueling of satellites by European satellite manufacturers: Hydrazine (CAS -No. 302-01-2); unsymmetrical dimethylhydrazine (CAS No. 57-14-7); Monomethylhydrazine (CAS # 60-34-4).20
Change allowing the purchase of certain fertilizers
The Swiss government already stressed in August that Switzerland was determined to make a contribution to combating the global food and energy crisis. He therefore decided to amend the ordinance so that certain fertilizers can be purchased if the goods are destined for a third country outside of Switzerland and the European Union. This decision is based on the special importance of Switzerland in the global fertilizer trade.21
1 Available by clicking shortcut.
2 Article 12b and Article 35 paragraph 25 of the Regulation.
3 Appendix 28 of the Regulation.
4 Article 12b(4) of the Regulation.
5 Article 12b(4)(c) of the Regulation.
6 Annex 29 of the Regulation.
7 Art. 28e para. 1bis of the Ordinance.
8 Art. 28e para. 2 and 2bis of the Ordinance.
9 Art. 28e para. 3 of the regulation.
10 Schedule 17.2 of the Regulation.
11 Articles 6(2)(c) and 28e(3)(g) of the Regulation.
12 Article 11a(4)(d) and Article 28e(3)(g) of the Regulation.
13 Article 14a paragraph 5, Article 14c paragraph 6 and Article 28e paragraph 3 let. g of the regulation.
14 Article 20(2) of the Regulation.
15 SECO media release of 23 November 2022, shortcut.
16 Article 2a(5) of the Regulation.
17 Article 2a(6) of the Regulation; for the Chemical Weapons Convention of January 13, 1993 here.
18 Article 2a(2) of the Regulation.
19 Article 2a(4) of the Regulation.
20 Article 2a(7) of the Regulation.
21 SECO media release of 23 November 2022, shortcut.