Swiss financial industry suffering from sanctions on Russia – media

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Swiss banks are concerned that the outflow of money from wealthy Russians caused by sanctions will not spread to their other clients, Swissinfo reported last week.

According to the source, G7 countries, mainly the United States, have questioned if Switzerland is doing everything possible to track down Russian funds hidden in bank vaults.

Swiss banks argue that, in addition to current tax evasion and money laundering restrictions, they must now comply with sanctions imposed by the United States, the European Union, and the United Kingdom. The situation is more confusing and difficult for banks with several foreign offices.

“Contradictions between sanctions regimes [of the US, EU, and UK] are repeatedly leading to major difficulties with implementation and unnecessary compliance risks,” Philipp Rickenbacher, CEO and President of Julius Bar Bank.

According to the study, Swiss sanctions against affluent Russians and their businesses have prompted them to relocate their money abroad, specifically to the UAE. According to the journal, Swiss private banks were concerned that the tendency would spread to clients from other nations. According to Reuters, Russian citizens have been shifting monies from Switzerland and the United Kingdom to Dubai after the two countries sanctioned Russia and threatened to freeze the assets of prominent Russian businesses and politicians.

Switzerland, which is not an EU member and considers itself impartial in foreign affairs, initially approved all of the penalties imposed by the EU on Russian persons and corporations, including asset freezes, in 2022. The move was explained by the government as a “extraordinary situation.”

After the Swiss decided to take part in the EU sanctions, it had no choice but to adopt the US sanctions as well, which have “extra-territorial reach due to the power of the dollar and US financial system,” the report said.

Swiss bankers allegedly urged that instead of haphazardly implementing these measures, the government should actively strive to influence global sanctions packages to fit its domestic agenda in the future.

The research also stated that there is no precise information on how much money wealthy Russians have in the nation. According to Swiss Bankers Association estimates, the sum might be approximately 150 billion Swiss francs ($170 billion), with Swiss banks managing $2.4 trillion in offshore assets.

“The lack of information on Russian assets in Switzerland suggests that authorities are not actively looking for hidden assets of sanctioned persons,” said Martin Hilti, head of Transparency International Switzerland, to Swissinfo. “They ought to.”

Bern has so far resisted this form of multilateral collaboration, claiming that Swiss sanctions work very well without joining the REPO task force (the Russian Elites, Proxies, and Oligarchs Task Force), which was founded in March 2022 by the EU, G7, and Australia.