Host Switzerland’s inadequate sanctions implementation

The issue of global food security and shipping in the Black Sea are high on the agenda of the high-level Summit on Peace in Ukraine. As the world's largest hub for grain trade, Switzerland has a particular responsibility in this regard. However, efforts to advance peace and food security are not in contradiction to consistent sanctions policy and must not replace it. On the contrary, sanctions are intended to weaken the financing of the Russian war. Thus, it is even more important to implement sanctions on an ongoing basis and to extend the provisions, for example to cover trade in commodities from the occupied territories of Ukraine.

Since the full-scale invasion, Russian occupying forces have systematically plundered grain in these regions, which is a violation of international humanitarian law. These plundered commodities end up on the world market disguised as Russian goods. A considerable part of the grain business from the Black Sea region is handled by Swiss-based traders. Recent research by Public Eye into this high-risk business shows a general lack of evidence for appropriate due diligence among Swiss traders in this high-risk business. Swiss sanctions provisions offer no remedy either against the trade in plundered grain as they only prohibit the import of goods from the occupied territories, but not the important trade with third countries. Switzerland blames its inaction in this regard on the lack of provisions in the EU instead of throwing its weight into the balance as the world's largest hub for grain trade.

A big question mark remains regarding the implementation of sanctions on coal trade. Although the business with Russian coal is prohibited in both the EU and Switzerland, Russian coal traders in this country which handled 75% of all Russian exports before the invasion, continue to exist – simply under new names. Neither the Federal Council nor the administration have a clear picture of whether these companies are complying with the sanctions. The relocation of the Russian oil trading business from Geneva to Dubai already showed that subsidiaries of Swiss companies remained involved and potentially violated sanctions provisions. In both areas, increased transparency is needed, and infringements must be punished.

In addition, the Swiss financial sector and its offshore service providers were highly attractive to Russian oligarchs for decades. In their search for assets of sanctioned individuals, the authorities poked around in a fog of opacity. Switzerland has refused to join the international Task Force REPO. To be a credible broker of peace, Switzerland must ensure comprehensive regulation of its high-risk sectors. Besides consistent sanctions implementation and effective measures against the trade in plundered grain, a reinforced anti-money laundering framework and a supervisory authority for the commodity trade sector are urgently needed.

More information: 

Oliver Classen, Media director, +41 44 277 79 06, oliver.classen@publiceye.ch