Oil from Russia: This is how Swiss companies recklessly bypass sanctions

class = “sc-cffd1e67-0 fmXrkB”>

Switzerland is no longer the most important center of international oil trade. Dubai replaced Geneva. This was revealed by a study by the NGO Public Eye, which analyzed Russia’s customs data. Dubai-registered companies exported more than half of crude oil from Russia’s four main ports between January and July 2023. Only 5 percent of Swiss companies.

As of February 2022, Public Eye estimates that 50 to 60 percent of Russian crude oil is still traded from Switzerland, mainly through Geneva. In June 2022, Switzerland imposed sanctions on Russia and set the ceiling price for a barrel of crude oil at $60 as of December 2022. One barrel equals 159 liters and is the common unit of crude oil. The United Arab Emirates did not impose these sanctions. Therefore, many companies previously operating in Geneva have increased their presence in the Emirates capital or established new companies there.

Subsidiaries in Switzerland operate in a gray area

The State Secretariat for Economic Affairs (Seco) is responsible for the implementation of sanctions. He explains that legally independent foreign subsidiaries of Swiss companies are generally not subject to Swiss legislation and therefore to the enforcement measures of the Federal Council.

This is exactly what Public Eye criticizes. “The point at which a subsidiary becomes legally independent is not defined. This lack of clarity creates a gray area,” says media spokesman Oliver Classen.

It’s different in other European countries. EU citizens or subsidiaries of EU-based companies will also have to comply with the sanctions if they are not in the EU. “On the other hand, Swiss citizens working in Dubai may challenge Swiss legislation,” says Classen. “This is sapping Switzerland’s political credibility.”

Now Seco needs to intervene

This would also weaken Western sanctions against Russia. In fact, Russia can bypass them via Dubai, possibly with the help of Switzerland. “But this does not change the attractiveness of Switzerland for raw material trade,” says Classen. Only some of the work will be outsourced. Geneva remains stable as an international center for trade in raw materials.

Public Eye requests that Seco clarify this scope in its sanctions regime as quickly as possible. Politicians are also increasingly aware that Switzerland has a problem. In June, the Foreign Policy Committee of the National Council asked the Federal Council to analyze “to what extent sanctions against Russia in the raw materials sector are currently being complied with and where deficiencies remain.” The report is still pending.

Source :Blick