Is Switzerland Doing Enough To Freeze Russian Assets?

(MENAFN- Swissinfo) Swiss sanctions are constantly scutinised both within Switzerland and in other countries. © Keystone / Martial Trezzini

Switzerland is coming under increasing pressure to ramp up efforts to trace and freeze the assets of sanctioned Russians. Can it do more? SWI swissinfo.ch looks at the main areas of contention.

When not covering fintech, cryptocurrencies, blockchain, banks and trade, swissinfo.ch's business correspondent can be found playing cricket on various grounds in Switzerland - including the frozen lake of St Moritz.

• Pусский (ru) Швейцария и поиск российских финансовых активов: что сделано?

The world's largest offshore wealth centre and global commodity trading hub has so far frozen CHF6.3 billion ($6.3 billion) and identified 11 properties belonging to Russian oligarchs. But some critics, both at home and abroad, have higher expectations.

The Swiss Bankers Association (SBA) estimates that banks hold up to CHF200 billion belonging to all Russian clients, the majority of whom are not subject to sanctions. This fact, it says, explains why only CHF6.3 billion has been frozen.

Domestically, left leaning political parties say Switzerland should be doing more to freeze assets. The Social Democrats, for example, unsuccessfully demanded the formation of a dedicated federal taskforce to track oligarch funds.

Both the Ukrainian and United States ambassadors to BernExternal link have called on Switzerland to uncover assets that are hidden behind shell companies or obscured by managers who act as proxies for the true beneficial owners.

The most damaging broadside came from the US Helsinki Commission, a quasi-governmental body of politicians that has a hand in influencing US foreign policy. The Commission staged a public hearing on May 5 that accused Switzerland of being a safe haven for Putin regime fundsExternal link .

The Swiss authorities and financial centre have robustly defended their track record at implementing European Union sanctions.“Switzerland has no reason to be ashamed of the way it applies sanctions by international comparison,' said Swiss government spokesperson André Simonazzi in response to the Helsinki Commission allegations.

Switzerland was initially reluctant to impose financial sanctions on Russian individuals and entitiesExternal link after Russian President Vladimir Putin ordered the invasion of Ukraine on February 24. The government argued this move could violate Switzerland's historical position of political neutrality.

This stance was met with public protests, rebukes from some political parties, damaging media headlines and pressure from the US and EU. Four days after the invasion, Switzerland announced a u-turn and began imposing full EU sanctionsExternal link on March 4.

Critics, such as the Social Democratic party, say this demonstrates that Switzerland was ill-prepared to rapidly track down Russian assets. Some cantons have complained that a demand to report villas and other assets belonging to oligarchs was poorly coordinated by the State Secretariat for Economic Affairs (Seco), the government department responsible for implementing sanctions.

Anti-corruption NGO Public Eye points out that Switzerland has a track record of enforcing EU sanctions since the turn of the Millennium. But the scope, scale and speed of sanctions imposed against Russia since its invasion of Ukraine are unprecedented.

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