Switzerland Won’t Implement the EU’s Russia Sanctions on Subsidiaries

(Bloomberg) — Switzerland has decided not to fully implement the latest package of European Union sanctions against Russia, saying Swiss law already allows measures to prosecute subsidiaries of companies based in the country.

“With the 14th sanctions package, the EU has introduced a general obligation for businesses to ensure that their subsidiaries in third countries do not undermine the EU’s sanctions,” the government said in a statement on Wednesday.

“Under the current sanctions law, Switzerland already has the means to prosecute companies for circumventing sanctions by using their subsidiaries, and is actively doing so,” it said, highlighting that a number of such cases are currently being investigated and that one has already been passed on to the Swiss attorney general.

“Against this background, the Federal Council has decided not to adopt this EU measure in its current form,” it said, adding that the economy ministry will keep an eye on the situation.

Since Russia’s attack on Ukraine in early 2022, Switzerland has implemented most sanction packages passed by the EU.

Not everyone is happy with the government’s decision. Switzerland’s Social Democrats called the move “scandalous.”

“Today’s U-turn by the Federal Council is a huge step backwards,” party president Cedric Wermuth said in a statement. “The government is openly putting the interests of commodity companies above solidarity with Ukraine and international peace.”

As the country’s second-biggest party, the Social Democrats are part of the government. Decisions in the seven-member executive are usually made by consensus, often also outside of party lines. 

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