Switzerland is facing scrutiny from G7 countries, particularly the United States, over its efforts to track Russian assets hidden in Swiss bank vaults. The Swiss banks argue that they already have to comply with tax evasion and money laundering regulations, and now they are burdened with adhering to US, EU, and UK sanctions as well. This complexity is especially challenging for banks with multiple branches abroad.
Philipp Rickenbacher, the CEO of Julius Bar bank and president of the Swiss Wealth Management Association, expressed concerns about the contradictions between the sanctions regimes, stating that they frequently lead to difficulties in implementation and unnecessary compliance risks.
In 2022, Switzerland, although not an EU member state, adopted all the sanctions imposed by the EU on Russian citizens and companies, including asset freezes. The Swiss government justified this move as an “extraordinary situation,” stating that Swiss neutrality remains intact but they stand on the side of Western values.
After adopting the EU sanctions, Switzerland had no choice but to also adopt the US sanctions due to their extraterritorial reach and the power of the dollar and the US financial system. Swiss bankers argue that instead of passively adopting these measures, the government should actively seek to influence global sanctions packages that align with its domestic agenda.
One of the concerns raised in the report is the lack of precise information regarding the amount of money held by wealthy Russians in Switzerland. The Swiss Bankers Association estimates that it could be around 150 billion Swiss francs ($170 billion), with offshore assets managed by Swiss banks reaching $2.4 trillion.
Martin Hilti, the head of Transparency International Switzerland, criticized the Swiss authorities for not being proactive enough in searching for hidden assets of sanctioned individuals. He suggested that Switzerland should actively join international task forces to implement sanctions more effectively.
However, the Swiss government has rejected this idea of international cooperation, claiming that their sanctions already function well without joining the REPO task force established by the EU, G7, and Australia in March 2022.
In conclusion, Switzerland is facing scrutiny from G7 countries, particularly the US, over its efforts to track Russian assets hidden in Swiss bank vaults. Swiss banks argue that they already face challenges complying with tax evasion and money laundering regulations and are burdened with adhering to US, EU, and UK sanctions. The lack of precise information on the amount of money held by wealthy Russians in Switzerland raises concerns about the effectiveness of current measures. Critics argue that the Swiss government should actively seek to influence global sanctions packages to better align with its domestic agenda. However, the Swiss government has so far rejected international cooperation, stating that its sanctions already function well without joining the REPO task force. The situation poses unique challenges for Swiss banks with multiple branches abroad.
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