Swiss economic sanctions against Russia undermine neutrality and the rule of law

by Dr iur. Marianne Wüthrich

As is well known, the Swiss Federal Council decided on 28 February to adopt all EU sanctions against Russia – not voluntarily, according to those familiar with the geopolitical situation, but in any case with more zeal than demanded in Washington and Brussels, because it also wants to please the EU and NATO turbos at home.1 Since then, the Federal Council has been constantly adapting its decrees – each time with the phrase that this does not harm Swiss neutrality(!).2 Before Easter, the Federal Council adopted the fifth package of sanctions, not without a rather casual commentary on the situation in general and the Russian “war guilt” in particular.

The Russian government is right to protest against Switzerland’s abandonment of neutrality and against the ahistorical and anti-neutrality statements of our government (see box). Fortunately, however, there are also Swiss personalities who are countering and insisting on respect for neutrality and the rule of law.

Implementation of the sanctions against Russia:
“We are among the best in the world!”

“We are not only on track, we are among the best in the world,” Federal President Ignazio Cassis boasted to the Swiss state media on 16 April: “We have virtually sanctioned eight billion francs and we have seized twelve buildings.” To “track down Russian assets”, the Federal Council is working closely with EU, US and G7 task forces, Cassis said, adding: “This action by Switzerland is 100 per cent compatible with the country’s neutrality” – you almost cannot hear it anymore!3
  So quickly – and without opposition – is our sovereignty being sold off. At the same time, every person’s fundamental right to the protection of their personality is being thrown in the rubbish. Because according to Art. 16 Para. 1 of the "Ordinance on Measures in Connection with the Situation in Ukraine" of 4 March 2022 (which the Federal Council relies on the Embargo Act), an “obligation to report” applies to everyone: “Persons and institutions that hold or manage funds or know of economic resources that may be assumed to fall under the blocking pursuant to Art. 15 para. 1 must report this immediately to SECO.” Spying on neighbours? Along the lines of “Every Russian is suspect”? That is reminiscent of dark times… 
  Let us give the floor to a Swiss expert to put this outrageous process into perspective, the former president of the Swiss National Bank and todays vice-president at the world’s largest US asset manager “Blackrock”, Philipp Hildebrand, who views todays situation for Switzerland, Europe and the world with concern not only as a banker but also as a Swiss citizen: “What worries me is the legal arbitrariness with which some of the actions have been taken. Who will decide which accounts are closed – which will force companies to close because they no longer have bank access and can no longer pay wages? Who will decide who is close to Putin? I wouldn’t be surprised if there is a lot of concern among clients of Swiss banks because for years they relied on the stability, legal certainty and long-term nature of Switzerland. These were the core values of the Swiss financial centre.4 Incidentally, the media are already discussing whether the obligation to disclose should also apply to lawyers – that would be the beginning of the end of lawyer-client confidentiality!

Swiss constitutional state: Here we are not (any longer) among the best

I asked the General Secretariat of the Federal Department of Economic Affairs, Education and Research (EAER) three questions about the confiscation of Russian assets and houses. Here are excerpts from the answers given by Michael Wüthrich, the media spokesman for the EAER.

What is the constitutional basis for the freezing of bank accounts and the seezing of buildings?
Michael W.: The Federal Council took the decision in principle [...] on 28 February to adopt EU sanctions in connection with the situation in Ukraine. [...] The ordinance on measures in connection with the Situation in Ukraine was issued by the Federal Council on the basis of the Embargo Act (EmbA) and will be adapted when new sanctions are adopted.

Note: The “Federal Act on the Implementation of International Sanctions” (Embargo Act) of 22 March 2002 allows the Confederation to take coercive measures to enforce sanctions imposed by the UN, the OSCE or “Switzerland’s main trading partners” which “serve to ensure compliance with international law, in particular respect for human rights”. (EmbA Art. 1) The EmbG lists some very widely defined articles as constitutional bases, for example FC Art. 54 para. 1: “Foreign affairs are a matter for the Confederation”. Everything can be based on this!
  From the point of view of international law, the only permissible sanctions against a state are those decided by the UN Security Council – which in fact hardly ever happens, because as a rule at least one of the five veto powers votes against it. The fact that Switzerland has laid down in law that sanctions imposed by “Switzerland’s most important trading partners” (the EU? the USA? China?) are to be enforced by means of coercive measures is also very questionable in terms of neutrality law.

How do you seize a building?
The freezing of assets is to be distinguished from confiscation; according to the Embargo Act, property rights remain with the sanctioned person in the first case (rule of law). Houses, cars and the like are also blocked, provided these persons are listed. In concrete terms, however, these assets are not confiscated. Trading in them, however, is prohibited. As an example: a house may remain inhabited by a sanctioned person, but it may not be sold or rented out.

Note: The guarantee of property is one of the most important fundamental rights in the constitutional state (Federal Constitution Art. 26). By theoretically leaving the sanctioned homeowner his or her property rights, the state cloaks the actual encroachment on the guarantee of property. If a homeowner is not allowed to rent or sell his house, what are his property rights?

What remedies do the sanctioned individuals and companies have?
Currently, 1091 natural persons and 80 companies and organisations are listed in Annex 8 of the “Ordinance on Measures in Connection with the Situation in Ukraine” – analogous to the EU. [...]
  Individuals, companies and organisations sanctioned by Switzerland can submit a so-called delisting request to the competent Department of Economic Affairs, Education and Research EAER. The EAER examines this and issues a contestable ruling. Any delisting would have to be decided by the Federal Council as a whole. This ensures that the rule of law is upheld.

Note: In order to be removed from the list, the person concerned must therefore apply to the same department that is entrusted with implementing the sanctions. The EAER, ultimately its head, Federal Councillor Guy Parmelin, examines the application and then decides, together with the other six Federal Councillors, whether the applicant’s name should be removed from the list. Since the decision on who to put on the list was made in Brussels and Washington respectively, the Federal Council is presumably neither willing nor able to judge the legality or illegality of the sanction. “The rule of law is therefore upheld,” replies the EAER – really?

Take countermeasures and hold on to Swiss values!

There is an urgent need for voices of dissent to these devastating events in Switzerland. There are some in our country, for example Guy Mettan, member of the Grand Council of the Canton of Geneva and former editor-in-chief of the “Tribune de Genève”, who was quoted in the last issue of Current Concerns with his striking statements on the abandonment of our neutrality by our “own team”.5 In a recent lecture, he called on us citizens to resist: “Switzerland has given up its neutrality, which it has held on to for two centuries, in a few days without a fight. I no longer recognise my country! Now it needs the resistance of a small minority.” That feels good.
  Blackrock banker Philipp Hildebrand also proves himself to be a good Swiss and a critical citizen of the world in a recent interview with the Handelszeitung (see box). Towards the EU, he advises Switzerland to “act wisely, buy time and wait to see how things develop.” Now is not the time to seek the next round of talks with Brussels. On neutrality: “Neutrality was indeed undermined very quickly, without a constitutional amendment and without a clear legal basis.” Hildebrand raises the question of what it means for diplomacy “if one could and would like to offer good services, but at the same time is no longer in a truly neutral situation and is therefore no longer even requested.” According to Philipp Hildebrand, Switzerland is facing a major challenge: “if the world moves back into a kind of Cold War logic, one has to rethink and articulate the foreign policy strategy [...].”6 
  It is to be hoped that our representatives in Bern will “act wisely” in this sense and first rethink their positioning in Europe and in the world in the future, instead of manoeuvring our country into a situation from which we almost cannot find our way out.   •

1 See Wüthrich, Marianne. “Ukraine sanctions: Federal Council under massive pressure from within and without. Neutrality policy is not a drop-down menu!” In: Current Concerns No. 6 of 15 March 2022
2 Federal Council Ordinance of 4 March 2022 on Measures in Connection with the Situation in Ukraine
3 “Bundespräsident zur Ukraine. Cassis sieht Schweiz bei Sanktionspolitik ‘bei den Besten’” (President of the Confederation on Ukraine. Cassis sees Switzerland as “among the best” in sanctions policy). SRF News of 16 April 2022
4 Meier Diem, Markus. “Es ist sehr bedrohlich” (It is very threatening). Interview with former President of the National Bank Philipp Hildebrand In: Handelszeitung of 14 April 2022
5 Wüthrich, Marianne. “Swiss neutrality and the rule of law as indispensable prerequisites for the ICRC's work”. In: Current Concerns of 26 April 2022.
6 Meier Diem, Markus. “Es ist sehr bedrohlich” (It is very threatening). Interview with former President of the National Bank Philipp Hildebrand. In: Handelszeitung of 14 April 2022

Neutrality is not measured by words but by deeds

Foreign Ministry Spokeswoman Maria Zakharova’s comment on statements by the Swiss Confederation on Ukraine of 11 April 2022

“The Foreign Ministry has noted the recent statements on the developments in Ukraine made by the Swiss leadership, which raise justified concerns.
  In particular, the Confederation President Ignazio Cassis, who also heads the Federal Department of Foreign Affairs (FDFA), used his April 7 interview with Luxembourg’s Le Quotidien to proclaim the end of an era, which had lasted since the end of World War II, ‘when no sovereign, democratic country on the continent suffered from an attack.’
  We would like to remind the head of the Swiss state that it was the 1999 NATO bombings and missile strikes against peaceful cities in Yugoslavia that undermined the foundations of the post-war era and disrupted international law. Forgetting these historical facts and loosely interpreting them to fit the current political agenda is totally unacceptable.
  In addition, in its April 8 statement in the wake of the latest barbarous crimes perpetrated by the Ukrainian regime in Bucha and Kramatorsk, the Swiss FDFA ignored our detailed explanations and blindly pinned the blame on Russia.1
  We firmly condemn the assessments along these lines by Switzerland and urge Bern, which aspires to position itself as a neutral and honest broker, to make use of facts in all objectivity and good faith.
  It is our hope that statements by the Swiss leadership on their unwavering commitment to neutrality are not empty words. However, the actual steps Bern takes will show whether this commitment is sincere. It is these steps that Russia will look at when assessing the true value of the neutral status of the Swiss Confederation.”

1 On 8 April, the EU adopted further sanctions against Russia and certain restrictive measures against Belarus, in light of Russia’s continuing military aggression against Ukraine and reports of atrocities (committed by the Russian armed forces) in Bucha.(Pressrelease by the Swiss Federal Council of 13 April 2022)


Testing of loyality to the President of the Zurich Art Society?

mw. At present, the former President of the National Bank, Philipp Hildebrand, is a candidate for the presidency of the Zürcher Kunstgesellschaft (association supporting the Zurich Kunsthaus). He was unanimously nominated by the board, which also includes Mayor Corinne Mauch (SP).
  The IG Transparency put up a fight against Hildebrand’s candidacy. Anything that doesn’t suit their representatives has no connection whatsoever with the Zurich Art Society. In his interview with the Handelszeitung, Hildebrand answered the question “How do you assess the invasion of Russia into Ukraine?” replied: “The war in the Ukraine is a devastating, dramatic and tragic development, which, however, has been in the making for years or decades. Since 2008 at the latest, this story has continued to develop in the wrong direction.”
  This appropriate historical classification, as well as the fact that Hildebrand’s wife is Russian by birth (!), causes the people at IG Transparency to take offense at Philipp Hildebrand: his election would be a “reputational risk” for the city of Zurich. “His rejection of the Swiss sanctions against Russia puts him close to understanders of Putin. The strong participation of his Russian wife in the commodities group Louis Dreyfus Co. (LDC) [...] raises further questions. […] Before the election, it is therefore imperative to get Hildebrand to make clear statements about possible sponsors, the origin of sponsorship money, his position on the sanctions and on Russia’s war against Ukraine.” (accentuations mw)
  It is to be hoped that the electoral body will not allow itself to be influenced by such opinion-snoopery and resentment against Hildebrand’s Russian wife, but will adhere to the constitutional basic rights (freedom of expression, protection of personality) and will vote for the obviously suitable candidate.

Sources: Herwig, Sarah. “Controversy over the presidency of the Zurich Art Society”. SRF 2 Kultur und Gesellschaft of 21 April 2022.  Statement of the IG Transparency on the candidacy of the former National Bank President and current Blackrock Vice President Philipp Hildebrand as President of the Zurich Art Society from 18 April 2022

Respect Swiss law of neutrality!

mw. – No flyovers of NATO military aircraft with war material for Ukraine.
In accordance with the law of neutrality1 the Federal Council decided on 11 March that in the context of the Ukraine conflict “the following flyovers will not be authorised: Flyovers by military aircraft of the conflicting parties that serve a military purpose. Flyovers of military aircraft of other states whose purpose is to provide military support to one of the parties to the conflict, namely with the delivery of war material”.2
  In accordance with this clear regulation, FDFA head Ignazio Cassis asked NATO member Canada at the end of March to withdraw its request for a transport aircraft loaded with weapons to fly over Switzerland – which Canada did.

– No delivery of ammunition purchased in Switzerland to Ukraine
On 24 April, the Federal Department of Economic Affairs, Education and Research (EAER) prohibited Germany from sending Swiss-made ammunition to the war zone, citing Swiss neutrality and “the mandatory rejection criteria of the war material legislation” (War Material Ordinance of 25 February 1998).
  The NATO states know the Swiss law of neutrality and will cope with the refusals from Bern. What must give us Swiss much more food for thought is the prompt event of great excitement about the Federal Council’s decisions in the Swiss mainstream media. Carried by the prevailing emotional wave, Gerhard Pfister, President of the Centre Party, actually tweeted on 25 April that the Federal Council should have permitted the delivery of ammunition to Ukraine by means of emergency law. At least the “Berner Zeitung” brings us back to reality:
  “The law of neutrality, enshrined in the Hague Agreement of 1907, prohibits neutrals from supporting belligerent states with troops or supplying them with weapons. One may think this is right or wrong in the Ukraine war. But it is binding international law. Full stop.”3 Yes – full stop!

1 Agreement concerning the rights and obligations of neutral powers and persons in the event of a Land War, adopted in The Hague on 18 October 1907.
2 Federal Council media release of 11 March 2022
3 Häfliger, Markus. “Commentary on neutrality and the Ukraine war. Arms exports to Kiev are wrong. The only question is: for how much longer?” In: Berner Zeitung, 26 April 2022

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