Switzerland Follows EU's Russia Sanctions And SWIFT Ban

Law360, London (March 4, 2022, 4:45 PM GMT) -- The Swiss government announced on Friday that it will adopt financial sanctions imposed on Russia by the European Union, including barring the country's banks from using the SWIFT global financial messaging network, in response to its military intervention in Ukraine.

Switzerland's policymaking Federal Council announced the decision to impose many of the same sanctions in the financial sector as those adopted by the EU this week.

"In particular, this concerns SWIFT, the international messaging system for financial transactions," the Federal Council said.

The SWIFT exclusion makes Switzerland the latest major financial center after Britain, the U.S. and Europe to deny Russian banks access to the nerve center for international financial transactions and trade financing.

The new steps announced on Friday, which were due to take effect at 6 pm that day, expand on Switzerland's initial financial and trade sanctions, announced on Feb. 28, that froze the assets of individuals and companies.

Other new measures include banning Russian companies from public financing and financial assistance. Swiss banks are also forbidden from providing securities and loans to Russia, or accepting deposits from the country. Financial transaction with the Russian central bank are also prohibited, the Federal Council said.

Switzerland also followed suit in EU trade sanctions by banning exports to Russia of some goods and services in the oil sector, as well as technology or insurance cover for Russia's aviation and aerospace industries. The government also said it will add to the list of individuals close to Russian President Vladimir Putin who will have their Swiss bank accounts frozen.

Switzerland had been under pressure to match steps taken by the West in cutting off Russia from its foreign reserves and the world financial system to hinder the Kremlin's ability to finance its war in Ukraine. 

The Swiss government said the new sanctions are compatible with Switzerland's neutrality, and that it will "decide autonomously" whether to adopt any further EU sanctions against Russia.

--Editing by Ed Harris.

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