learned nothing? Switzerland is once again in the crosshairs of the US. Carlsberg has lost control of a Russian brewery

Switzerland is again targeted by the United States. Strong statements were made in Washington on Tuesday at a hearing of the Helsinki Commission, which monitors compliance with the rule of law in Europe. When it comes to sanctions against Russia, Switzerland is said to be the “weak link” of well-fortified western democracies.

In April, the ambassadors of the G7 countries in Bern criticized Switzerland’s insufficient implementation of the sanctions in a letter to the Federal Council. Especially the confiscated CHF 7.5 billion of Russian assets is not enough, although the amount is higher than in most other countries and not all oligarchs have been punished.

The State Secretariat of Economic Affairs (SECO) rejected the allegations, but it is also about the reconstruction of Ukraine, which should be financed with Russian money if possible. As the largest G7 country, the US plays a central role. Your ambassador Scott Miller had sharply criticized Switzerland in a very undiplomatic NZZ interview.

Again the case of Magnitsky

A different story emerged at Tuesday’s hearing. British-American businessman Bill Browder testified before the committee as a “star witness”. He worked as a financial investor in Russia, but a significant amount of the money trickled through corrupt channels and probably ended up in Switzerland.

Browder’s Russian lawyer, Sergei Magnitsky, made the allegations public and died in prison under unclear circumstances. Since then, Bill Browder has been a fierce opponent of Vladimir Putin – and of Switzerland. She had “frozen” 18 million francs, but the federal prosecutor’s office decided to drop the case and release the money.

Sanctions against federal prosecutor’s office

The decision infuriates Bill Browder. For him, Switzerland is a banana republic. He was dismissed with a complaint to the Federal Criminal Court, and now he is taking the case to the Federal Supreme Court. Before the Helsinki Commission on Tuesday, he called for sanctions against federal prosecutor Stefan Blättler and his predecessor Michael Lauber.

This will hardly have any concrete consequences. In an interview with CH Media’s correspondent, US politicians downplayed their criticism of Switzerland and the hearing went largely unnoticed in America. However, a look at the past shows that Switzerland is making a mistake if it takes the attacks lightly.

lessons from the past

In the controversy surrounding the alleged accounts of Holocaust victims in the 1990s, Switzerland first ignored US criticism and then grew outraged before it – or rather the banks – conceded. Bank secrecy was also weakened again and again under pressure from the US and eventually completely abandoned.

Now it will probably remain under closer scrutiny, especially with regard to the sanctions against Russia. In addition, there are two areas in particular where one wonders whether Switzerland has actually learned nothing from past experience.

money laundering

Switzerland has long felt that this topic was not its business. Several cases of drug money laundering in the 1980s, in which the first Swiss Federal Councilor Elisabeth Kopp was caught, and the associated pressure from abroad led to a reconsideration. But the legislation still has “gaps” today.

The trade in commodities is no more subject to the Money Laundering Act than the art and real estate markets, although these areas are particularly vulnerable. The so-called financial intermediaries, in particular lawyers, civil-law notaries and trustees, only have to partially comply. They mainly advocate ‘self-regulation’.

A bill seeking to change this was watered down in parliament two years ago after massive industry lobbying to the point of ineffectiveness. Even the then SVP finance minister, Ueli Maurer, had called for financial intermediaries to be subject to the law, also in view of possible pressure from abroad.

merchandise

Switzerland is a ‘world power’ in this field, according to the NZZ, as the headquarters of large companies such as Glencore, Trafigura and Vitol. But the industry has a reputation problem. It is associated with child labour, corruption and environmental damage. These aspects played an important role in the vote on the Corporate Responsibility Initiative.

Now she is being targeted by the United States because of Russia. Next week, a delegation from the Ministry of Finance will travel to Switzerland to exchange views with industry and SECO representatives. It is still mainly about information, because trade in Russian raw materials such as oil is not sanctioned. They are too important to the global economy.

That could change if prices have exploded since the start of the war in Ukraine and commodity traders have made huge profits. Washington won’t lose interest in them any time soon because the sector has “become too strategic,” the NZZ wrote. Switzerland must “credibly assure” that it has industrial risks under control.

That is easier said than done, because Switzerland also has a policy of looking the other way and keeping people on the line when it comes to economic sectors with reputational risks. There is no transparency register for beneficial owners of companies. As a small, “neutral” country with no strong partners, Switzerland is a welcome target for attackers.

No shortage of warning voices. “The fact that parliament exempted lawyers and trustees from the money laundering law was not a masterpiece. And that it does not close its eyes to the major problems we are facing in the commodity trade,” says ex-diplomat Paul Widmer, who is close to the SVP, in an interview with CH Media.

Finance Minister Karin Keller-Sutter (FDP) wants to make another attempt to revise the Money Laundering Act after the summer holidays. “Money laundering is a reputational risk for the financial center. We have an interest in keeping the attack surface as small as possible,” said KKS in an interview with the “Tages-Anzeiger”.

It is still unclear what exactly is in the template. But the citizens of parliament would do well this time to take the admonition of “their” federal councilor to heart. Before the Americans come and unwrap the hammer.