Switzerland, long a place for Russian oligarchs to park their money, announced Monday it would set aside its long-standing and deeply-rooted tradition of neutrality in order to freeze Russian financial assets in the country, as the fast-moving international reaction to Russia’s invasion of Ukraine continues. In so doing, it joined the European Union and a growing list of countries attempting to penalise Russia, as Luxembourg drew its financial sector’s attention to several EU sanctions measures.
The EU decision to add Putin and Lavrov to the longer list sanctioning 351 Duma lawmakers and members of Putin’s inner circle was confirmed by Josep Borrell, the EU’s foreign policy chief, on the evening of Friday just past.
Swiss national bank data showed that Russian companies and individuals held assets worth more than USD11 billion in Swiss banks in 2020. Switzerland, as a hub in the global commodities trade, also hosts many companies trading Russian oil and other commodities.
Luxembourg exposure
By comparison, the Luxembourg asset management sector is exposed to about 18 billion euro in Russia equities and debt, according to Luxembourg Central Bank (BCL) figures. This represents about 0.3% of the total in assets managed via Luxembourg.
Luxembourg financial regulator the CSSF has issued a statement Tuesday morning directing the financial sector’s attention to the fact that the European Union has approved three decisions on restrictive measures affecting the financial industry. They specified the EU’s updated list of sanctioned individuals and entities, the EU ban on providing financing to Russia or its central bank as well as a separate measure imposing sanctions on relations with the Russian-separatist Donetsk and Luhansk areas now occupied by Russia.
Swiss list
Switzerland’s president, Ignazio Cassis, after a meeting with the Swiss Federal Council, announced his country would immediately freeze the assets of Russia’s president, Vladimir Putin, Prime Minister Mikhail Mishustin and Foreign Minister Sergey Lavrov, as well as all of the 367 named individuals sanctioned last week by the European Union.
Cassis said that his country was departing from its usual policy of neutrality because of what he described as the “unprecedented military attack by Russia on a sovereign European state,” but said it was offering to help mediate in the conflict.
Case by case basis
Switzerland also joined Europe in closing its airspace to Russian aircraft, apart from humanitarian or diplomatic purposes.
However it would make case-by-case evaluations of whether to join in subsequent EU sanctions.
The Swiss president had previously expressed concern that the Alpine nation’s credibility as a neutral diplomatic intermediary would suffer if it automatically followed the EU sanctions. Switzerland announced last week it would enforce travel bans against Russians on the EU sanction list and stop Swiss banks from accepting new Russian money. But it then declined to go so far as cutting off individuals’ access to their bank accounts.