Switzerland maintains an autonomous sanctions regime that has progressively aligned with EU measures, meaning that companies operating through Swiss entities face overlapping compliance obligations under Swiss law and, in many cross-border structures, under EU sanctions directly. Failures in sanctions screening, inadequate controls on asset freeze obligations, or involvement in transactions that risk circumvention can expose Swiss-based businesses and their directors to criminal liability, regulatory action by FINMA, and reputational damage that is difficult to reverse. Ferraz & Whitmore advises international businesses, funds, and trading groups on navigating these obligations with precision – before a problem crystallises.
Why Sanctions Risk in Switzerland Has Intensified
Switzerland's position as a major financial, commodities, and trading hub has made it a focal point for sanctions enforcement. Regulators and foreign counterparts increasingly scrutinise Swiss-nexus transactions for circumvention risks, and the pace of new measures has accelerated markedly in 2026. The EU's 20th sanctions package was adopted on 23 April 2026, and the 21st package – Regulation (EU) 2026/1848 – followed on 23 July 2026. A specific prohibition on the digital rouble and the RUBx instrument entered into force on 24 May 2026. Switzerland has adopted parallel measures tracking this trajectory, and businesses that have not revisited their compliance frameworks since early 2026 are almost certainly operating with outdated procedures.
A particularly significant development concerns litigation protection. Council Regulation (EU) 2026/506, adopted on 23 April 2026, introduced anti-suit protection for EU persons facing proceedings brought by sanctioned Russian persons in Russian courts in breach of agreed jurisdiction or arbitration clauses. Switzerland enacted a parallel provision under art. 29d. For Swiss-seated companies with Russian counterparties, this creates both a procedural shield and new compliance considerations when managing legacy contracts.
EU sanctions also apply directly to EU persons and EU-nexus transactions regardless of where an entity is incorporated. A Swiss subsidiary of a German or Portuguese parent, or a Swiss-based commodities trader using EU banks and correspondents, cannot treat Swiss autonomous sanctions as its only frame of reference. The interaction between the two regimes – and the risk that a transaction technically permitted under Swiss rules may nonetheless breach EU law – is one of the most common sources of exposure we see in practice.
Core Obligations: What Swiss Law and Parallel EU Measures Require
Swiss sanctions law imposes obligations across several categories of actor. The following represent the primary areas of compliance exposure:
- Asset freeze and notification obligations: Swiss-based financial intermediaries, trustees, and corporate service providers must identify, freeze, and report assets belonging to designated persons. Notification to the competent authority is mandatory and subject to strict timelines.
- Export controls and goods screening: Trade in certain goods, technologies, and services to sanctioned jurisdictions or entities requires screening against applicable lists. Swiss export control law interacts with EU dual-use restrictions, and Swiss-incorporated exporters with EU-nexus supply chains must assess both regimes.
- Sanctions screening of counterparties: Ongoing screening of customers, beneficial owners, and transaction counterparties is expected of all regulated entities and is increasingly demanded by banks and insurance counterparts from non-regulated businesses as a condition of the commercial relationship.
- Best-efforts obligation: Swiss law and EU regulations impose a best-efforts standard on certain categories of service provider, requiring active steps to prevent circumvention – not merely passive avoidance of direct transactions.
- Circumvention risk: Transactions structured to transfer value to sanctioned persons through third-country intermediaries, or to move assets ahead of designation, attract both criminal and regulatory liability. FINMA and the federal prosecutor have each demonstrated willingness to pursue circumvention cases.
- Corporate register and ownership transparency: Beneficial ownership information held in the Handelsregister and related registers is increasingly used by enforcement bodies. Gaps or inaccuracies in registered ownership structures are treated as aggravating factors in investigations.
Where a Swiss entity is also subject to EU sanctions – whether because of its corporate structure, the currency of transactions, or the involvement of EU-domiciled group entities – the more restrictive provision applies. Coordinating Swiss and EU obligations requires a careful, jurisdiction-by-jurisdiction analysis rather than a single-standard approach.
FINMA and the Regulatory Enforcement Landscape
FINMA supervises financial intermediaries with respect to their anti-money laundering and sanctions-related obligations and has the authority to initiate enforcement proceedings, impose remedial measures, and refer matters to the federal prosecutor. A FINMA enforcement finding does not require a criminal conviction and can result in reputational publication, licence conditions, or – in serious cases – the withdrawal of authorisation.
The Bundesgericht (Swiss Federal Supreme Court) has addressed the interaction between Swiss procedural law and sanctions restrictions in several contexts, including questions arising under the SchKG (Schuldbetreibungs- und Konkursgesetz) in enforcement and insolvency proceedings involving sanctioned persons. These decisions have clarified, among other things, the extent to which sanctions restrictions can constitute an impediment to the exercise of creditor rights – an issue with direct relevance for businesses managing distressed counterparties.
For businesses outside the financial sector, enforcement is led primarily by the State Secretariat for Economic Affairs (SECO), whose list-checking and transaction-reporting obligations apply broadly. The absence of a FINMA licence does not provide shelter from Swiss sanctions law.
If your business operates in Switzerland and you are uncertain whether existing compliance procedures adequately reflect the 2026 sanctions packages, we are available to discuss your exposure and help you assess where action is needed. Please contact us at info@ferrazwhitmore.com or visit our contacts page.
The Cross-Border Dimension
Very few businesses with a Swiss presence operate exclusively within Swiss law. Cross-border structures raise distinct questions that single-jurisdiction advice cannot resolve:
- A Swiss holding company making payments through an EU correspondent bank may be a de facto EU person for purposes of EU sanctions regulation, regardless of Swiss incorporation.
- Swiss-based traders sourcing or selling goods through EU counterparties must assess whether those transactions constitute prohibited services or are subject to sectoral restrictions under the EU package.
- Swiss professional service providers – lawyers, accountants, trust administrators – whose clients have EU-domiciled beneficial owners face obligations under EU law that cannot be discharged by Swiss compliance alone.
- The new anti-suit protection under Council Regulation (EU) 2026/506 and Swiss art. 29d creates parallel procedural rights that may need to be invoked concurrently in cross-border litigation management.
Our work on sanctions compliance in Germany, where EU regulation applies directly, frequently intersects with Swiss mandates. Clients managing group structures that span both jurisdictions benefit from coordinated advice that avoids gaps and inconsistencies between local compliance frameworks. For context on the German dimension, see our sanctions and trade compliance service page for Germany.
Cross-border sanctions exposure also arises in the context of corporate transactions. Acquiring or investing in a Swiss company with undisclosed Russian beneficial owners, legacy Russian contracts, or prior transactions in restricted goods can transfer unquantified liability to the buyer. Pre-acquisition sanctions due diligence – including review of Handelsregister filings, ownership chains, and transaction history – is a standard component of any Swiss M&A process involving counterparties with CIS or Middle East nexus. Our broader corporate practice in Switzerland provides the structural context for these assessments; more information is available on our Swiss corporate law service page.
How We Approach a Sanctions Compliance Mandate
Our approach varies depending on whether a client comes to us proactively – to build or audit a compliance framework – or reactively, in response to a regulatory inquiry, a frozen transaction, or a counterparty designation. In either case, we begin with a structured assessment of the client's sanctions exposure: the jurisdictions in which it operates, the categories of counterparty and transaction involved, and the regulatory regimes that apply to each.
For clients building or updating a compliance programme, we assist with policy drafting, screening procedure design, and training for senior management and operational teams. For clients facing an active enforcement situation or a transaction that has been flagged by a bank or counterpart, we provide urgent advisory support, including representation in dealings with SECO and FINMA where necessary.
The detailed procedural steps for establishing a Swiss-compliant sanctions programme – including screening workflows, documentation standards, escalation procedures, and reporting timelines – are set out in our Sanctions Compliance Guide for Switzerland, which we recommend as a companion to this page.
Self-Assessment: Key Indicators of Compliance Exposure
The following questions are not a substitute for legal advice, but they serve as a practical starting point for identifying where a review may be warranted:
- Has your entity reviewed its sanctions screening procedures in light of the EU's 20th and 21st sanctions packages (April and July 2026) and the digital rouble prohibition (May 2026)?
- Do your screening processes cover beneficial owners of counterparties, not only named parties to a transaction?
- Have you assessed whether your entity is treated as an EU person for purposes of EU sanctions, in addition to Swiss autonomous sanctions?
- Are your export control procedures calibrated to cover dual-use goods and technology in both Swiss and EU lists?
- Do you have a documented procedure for handling transactions that are frozen, delayed, or queried by a financial intermediary on sanctions grounds?
- If you have Russian counterparties with existing contracts, have you assessed the implications of art. 29d and the anti-suit provisions introduced in April 2026?
- Has beneficial ownership information in your Handelsregister filings been reviewed for accuracy and completeness in the last twelve months?
If any of these questions cannot be answered with confidence, a focused compliance review is likely to identify material gaps before they become enforcement issues.
Ferraz & Whitmore works with businesses at all stages of the compliance cycle, from initial framework design to active regulatory engagement. To discuss a specific situation or to arrange a preliminary review, please write to info@ferrazwhitmore.com or use our contacts page.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.