Switzerland: Eighth EU Sanctions Package Alignment — Oil Price-Cap Legal Basis, Steel/Aerospace Bans, Services Ban, Arms Embargo

Mechanism

On 23 November 2022 the Federal Council amended the Ordinance on measures in connection with the situation in Ukraine (SR 946.231.176.72) to adopt, in principle, the measures the EU had adopted as its eighth sanctions package. The amendment entered into force at 6pm the same day.

The headline change is the legal basis for an oil price-cap mechanism: a ban on the maritime transport to third countries of crude oil or petroleum products that originate in or are exported from Russia, with an exemption where the oil is purchased at or below a price cap. The cap's actual level was not set by this ordinance — the G7/EU coalition fixed it at US$60/barrel on 3 December 2022 (see the companion US OFAC determination filed as 2022-12-05-us-ofac-russia-crude-oil-price-cap-determination).

Beyond the price-cap basis, the amendment also:

• extends existing import/export restrictions to additional iron and steel

products and aerospace goods and goods of economic importance to Russia;

• bans the provision of IT, engineering, architecture and legal services to

the Russian government and to Russian companies;

• bans Swiss nationals and residents from holding board seats at certain

Russian state-owned companies;

• fully bans the provision of crypto-asset wallet, account or custody

services to Russian persons and residents, regardless of the value of the assets involved (removing a previously-permitted de minimis threshold);

• adopts an arms embargo against Russia, which — for reasons of Swiss

neutrality — was partially extended to Ukraine as well.

Downstream implications

• Establishes the Swiss domestic legal hook that the subsequent G7 $60/bbl

price cap (3 December 2022) and later cap revisions attach to; Switzerland did not need a fresh ordinance each time the cap level changed.

• Swiss-based commodity traders, shippers and insurers providing covered

services (brokering, financing, shipping, insurance, flagging, customs brokering) for Russian seaborne crude became subject to the same compliance burden as their US/EU counterparts from this date.

• Professional-services firms (IT, engineering, architecture, legal) with

Russian government or corporate clients had to wind down those engagements.

Open questions

• No company-level enforcement actions tied specifically to this Swiss

ordinance (as opposed to the EU/US parallel measures) were identified in the primary source.