Ukraine Conference in Lugano: Host country Switzerland must finally stop its war financing

Since the 1990s, Switzerland has been a popular refuge for Russian business magnates, whose assets are owed to the wild transition from planned to market economy and personal proximity to the Kremlin. Public Eye has published a Gallery of 32 of these billionaires of Putin's grace (including two women) and their "Swiss connections". Our research exposes how systematically the Swiss "locational advantages" are used: the offshore industry to establish letterbox companies, the unregulated commodity trading hub to make money and the lack of financial transparency to hide it. Unnoticed by the public, Switzerland has also become the central hub for Russian coal. Today, three quarters of all exports from Russia pass through Zug and Eastern Switzerland, a recent study by Public Eye shows. Despite an embargo on Russian coal, in force since the end of April, the State Secretariat for Economic Affairs (SECO) does not even know which Russian coal producers and traders are based in Switzerland, let alone to whom they belong.  

Public Eye also revealed that, despite international pressure, Swiss-based commodity companies remain major buyers of Russian crude oil. Approximately 60% of Putin's black gold, as well as of the refinery products are still traded mostly via Geneva-based companies. Some industry leaders have long been strategic partners of the Kremlin. Since the beginning of the war, however, a number of small, obscure companies have begun trading substantial quantities of Russian oil via Switzerland. The war in Ukraine and the Russian blockade of maritime ports are also leading to a shortage of grain and other agricultural commodities that are vital for global food supplies. The skyrocketing prices generate record profits for Swiss-based agricultural traders while, at the same time, leading to increasingly severe hunger crises in developing and emerging countries. As a global agricultural trading hub, Switzerland must redistribute these crisis profits to the UN World Food Programme. 

We appeal to the Federal Council to immediately and fully implement all sanctions against oligarchs and Russian energy commodities adopted by the EU and to lobby Brussels to extend them to the import and trade of gas as quickly as possible. Furthermore, Switzerland needs a specialised authority for this opaque high-risk sector, also to ensure that the country’s commodity traders do not circumvent the sanctions against Russia. By granting licences, such a commodity market supervision authority, as drafted by Public Eye already back in 2014, would disclose the beneficial owners of front companies and ensure that commodities traded via Switzerland do not originate from sanctioned countries or conflict areas. The implementation of these measures, as well as the creation of a task force that actively searches for the assets of sanctioned persons in an internationally coordinated manner, would enable Switzerland to contribute significantly to finally cutting off Putin's money supply. 

We welcome that Switzerland assumes responsibility for the reconstruction of Ukraine by organising the "Recovery Conference" in Lugano. But to ensure that this humanitarian engagement remains credible domestically as well as within the international community, Switzerland must strictly implement the sanctions and regulate its trading hub. 

For more information contact:

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

Robert Bachmann, commodities expert, +41 44 277 79 22, robert.bachmann@publiceye.ch