Swiss sanctions against Russia – Further alignment with the EU – Implementation of the 18th Sanctions Package

1. Introduction

On 29 October 2025, the Swiss Federal Council adopted further sanctions against Russia with a view to mirroring the latest measures imposed by the EU on 18 July 2025. The corresponding amendments to the Ordinance on measures in connection with the situation in Ukraine ("UKRO") entered into force on 30 October 2025.

The Swiss State Secretariat for Economic Affairs ("SECO") simultaneously updated its FAQ guidance to clarify the scope and application of UKRO.

Redline comparisons and English translations of the UKRO and FAQ are available as follows:

• UKRO (as of 30 October 2025 and a redline against the version of  15 May 2025): here and here, respectively.
• SECO FAQ (as of 30 October 2025 and a redline against the version of 22 May 2025): here and here, respectively.

2. Key elements of the amended UKRO

The newly adopted amendments intensify existing restrictions, particularly in relation to commercial restrictions, financial services and energy-related activities. The following highlights some of the most relevant amendments:

• Targeted anti-circumvention mechanism (Article 5 (1^ter) UKRO)

Article 5 UKRO has been supplemented by a new paragraph 1^ter, empowering SECO to act where exports of controlled goods to third countries present a substantiated risk of re-export or use in Russia. If SECO possesses relevant information, it may now inform exporters and make the planned export of goods listed in Annex 1 subject to prior authorisation.

This new mechanism establishes an administrative safeguard against circumvention outside the EU/EEA area.

• Petroleum products refined from Russian crude (Article 12a^bis UKRO)

A new Article 12a^bis UKRO has been introduced, complementing the existing Article 12a UKRO, which already prohibits the purchase, import, transit and transport of crude oil and petroleum products of Russian origin.

The new Article 12a^bis UKRO extends these restrictions to petroleum products produced in third countries from Russian crude oil (tariff 2709 00).

According to the text, it is prohibited to purchase, import, transit or transport in or through Switzerland such refined products, as well as to provide services related to those activities, including financing and brokering.

Article 12a^bis (4) UKRO provides for an exception for third countries that were net exporters of crude oil in the preceding year, provided SECO does not possess sufficient indications to the contrary. This exception aims to protect legitimate trade flows where crude oil is locally produced and refined. That being said, we are not aware of any official list of such third countries.

Article 12a^bis UKRO will enter into force on 21 January 2026.

• Nord Stream 1 and 2 pipelines (Article 24a^bis UKRO)

A new Article 24a^bis UKRO establishes a ban on transactions relating to the Nord Stream 1 and 2 pipelines, covering the supply of goods or services linked to their commissioning, operation, maintenance or use, as well as related financing.

Limited exceptions exist for urgent safety or environmental interventions and for payments required by court or arbitral decisions; such transactions must be reported to SECO within two weeks.

• Coal and nuclear provisions (Article 24d UKRO)

Article 24d (2)(j) UKRO now allows transactions relating to coal (2701) when neither origin nor ownership is Russian and Russia serves only as a place of loading or transit.

Article 24d (3)(h) UKRO authorizes activities required to ensure the safe operation of civil nuclear facilities, including fuel supply, reprocessing and nuclear-safety work.

Operators established in Switzerland shall notify SECO of any transaction referred above within two weeks of its conclusion.

• Russian Direct Investment Fund ("RDIF") and exit licences (Article 26 UKRO)

The provision has been substantially recast. Where the former version targeted only the co-financing of RDIF projects, the revised article now establishes a full transaction prohibition, including the co-financing.

It prohibits any direct or indirect transaction with

• the Russian Direct Investment Fund;
• entities owned or controlled by RDIF;
• the entities listed in Annexes 36 and 37; and
• any person acting on their behalf or under their instructions.

Two limited derogations remain:

• SECO may authorize transactions strictly necessary for the purchase or transport of medical or pharmaceutical products;
• SECO may authorize performance of obligations arising from contracts concluded before 5 March 2022.

Further, under Article 30c^quater UKRO, SECO may, until 31 December 2026, authorise derogations from the prohibition in Article 26 (1) UKRO where this is necessary for the disposal of assets in the Russian Federation, for the withdrawal from the Russian market or for the termination of activities in the Russian Federation.

• Prohibitions relating to designated Russian banks (Articles 27 and 27a UKRO)

The prohibitions relating to Russian banks have been restructured and expanded.

Whereas the previous version of Articles 27 and 27a UKRO focused mainly on the provision and use of specialized financial messaging services (e.g. SWIFT), the revised provisions now establish a broad transaction ban.

Article 27 UKRO now prohibits any direct or indirect transaction with:

• the banks listed in Annex 14; and
• any Russian bank in which these entities hold more than 50% ownership.

A limited derogation may be granted by SECO for transactions with Zenit Bank in connection with:

• tariff heading 3402 90 goods; or
• the execution of contracts concluded before 1 January 2025 (until 1 January 2028 or contractual expiry, whichever is earlier).

Further, under Article 30c^quinquies UKRO, SECO may authorise derogations from the prohibition in Article 26 (1) UKRO where this is necessary for the disposal of assets in the Russian Federation or for the termination of activities in the Russian Federation.

Article 27a UKRO extends the same restriction to banks listed in Annex 14a.

• Software export and supply restrictions (Article 28e (1^quater) UKRO)

The new paragraph 1^quater prohibits the sale, delivery, export, transport or remote provision of the software categories listed in Annex 32 (enterprise-management, industrial design/manufacturing, financial-sector software) to:

• the Government of the Russian Federation; or
• entities established in Russia or in territories listed in Annex 6.

A transitional clause under Article 35 (39) UKRO allows execution of pre-existing contracts only for Annex 32, chapter 3 (banking and financial software), until 31 January 2026.

• Other measures noted by the Federal Council

In its communication of 29 October 2025, the Federal Council indicated that the amendments also introduce provisions aimed at preventing the enforcement in Switzerland of arbitral or judicial decisions initiated by sanctioned Russian persons. These provisions are reflected in Articles 30g and 30h UKRO, which address, respectively, the non-recognition of investor-State dispute settlement decisions and the possibility for Switzerland to seek damages.

The Federal Council also confirmed that Switzerland will not introduce, at this stage, the notification requirement relating to outbound fund transfers by EU-based companies owned or controlled by Russian persons, which formed part of the EU's 12^th sanctions package.

3. Update of the SECO FAQ

In parallel with the adoption of the 18^th package, the SECO has released an updated version of its FAQ document ("Aide à l'interprétation des sanctions").

This document functions as the consolidated interpretative guidance and clarifies SECO's reading of key provisions of the UKRO, notably Articles 12b, 13, 14 to 14f, 15 to 16, 20 to 25, 28b to 28e, and is equally applicable, where relevant, to the Belarus ordinance.

The following highlights some of the most relevant amendments:

• New section 1.2 now clarifies that:
  • interest, contractual payments and amounts ordered by Swiss / EEA / UK judicial, arbitral or administrative decisions may be credited to blocked accounts, provided they are immediately frozen;
  • third-party payments to sanctioned persons may also be credited, but must be frozen and reported without delay.

• New section 1.4 confirms in this context that:
  • Any third-party transfer to a blocked account must be reported to SECO as soon as it is credited.
  • No immediate reporting is required for interest, amounts due under existing contracts, or amounts ordered by Swiss / EEA / UK judgments or arbitral awards; these amounts remain subject to the annual aggregated reporting requirement.

• New section 1.15 in relation to close-out of derivative positions provides for the following:
  • No transitional period applies when closing open derivative positions involving sanctioned parties.
  • Positive balances in favour of a sanctioned counterparty may only be credited to a blocked account in Switzerland and must be frozen immediately.
  • Transfers to accounts in third countries are prohibited.
  • Amounts due to the non-sanctioned counterparty may be paid in accordance with the contract without prior SECO authorisation.

4. Reporting obligations – Reminder of key deadlines

[1]     Official SECO templates are published here: Link.

5. Due diligence – Reminder for financial institutions

Financial institutions should remain particularly vigilant to the risk of indirectly facilitating restricted transactions through providing financial services or financing. Indeed, in addition to prohibiting specific commercial activities, Swiss sanctions also restrict the financing of such activities, including the provision of loans, credit facilities, leasing, guarantees and insurance when linked to transactions involving sanctioned entities or sectors, as well as financial services more generally in certain specific cases.

This is particularly relevant when dealing with counterparties in jurisdictions considered to be "friendly" under Russian legislation, where there is an increased risk of sanctions circumvention. Financial institutions should ensure that financial services they provide do not indirectly support transactions that ultimately fall under Swiss sanctions prohibitions.

A notable risk area is the crude oil sector, where transactions involving vessel leasing, shipping or crude oil trading require enhanced due diligence. If a financial institution provides financial services – including payments processing or treasury management – to a client involved in vessel chartering, for example, where vessels may be used to transport Russian crude oil, the financial institution should verify that such financial services do not indirectly facilitate transactions that breach price cap regulations.

The recently introduced prohibition on transactions with Russian high-risk infrastructure (art. 24d UKRO) will require enhanced diligence efforts on transactions with potentially relevant touchpoints to assess compliance with the ban, applicable exemptions, and, as the case may be, notification obligations.

Further, recent U.S. sanctions developments illustrate the growing expectation that foreign financial institutions also manage exposure to U.S.-designated Russian actors. On 22 October 2025, the U.S. Treasury Department (OFAC) designated two major Russian oil companies under Executive Order 14024. Although these measures are not part of Swiss law, Swiss actors ahave to be aware that persons that continue to do business with or involving designated persons or their blocked subsidiaries risk being designated themselves pursuant to E.O. 14024 for having "materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of" a person blocked pursuant to the said Executive Order.

In its 2024 Trilateral Compliance Note (available here), the DOJ, OFAC and BIS recalled the extraterritorial expectations of U.S. authorities toward non-U.S. persons and foreign subsidiaries of U.S. companies.

To manage such risks effectively, financial institutions should consider implementing a comprehensive risk management approach, including:

• Enhanced due diligence procedures, ensuring verification of counterparties, beneficial owners and end-users, respectively destination of restricted goods (e.g., oil, luxury goods, etc.) to assess potential exposure to sanctioned transactions.
• Explicit contractual representations and warranties, requiring clients to certify compliance with applicable sanctions regimes, respectively certifications that certain goods will not be sourced from or delivered to Russia or other restricted regions.
• Continuous monitoring of payment flows and transaction structures, particularly in cases where financial services are provided to clients operating in high-risk jurisdictions or where there are indications of re-export or indirect trade financing.
• Internal escalation procedures, ensuring that potential red flags – such as complex trade routes, non-transparent payment structures or counterparties with previous sanctions exposure – are promptly reviewed by compliance teams.

Given the evolving regulatory landscape, financial institutions should regularly review and strengthen their internal risk management frameworks to ensure full compliance with Swiss and international sanctions.

6. Future developments

Sanctions are amended and adapted on an ongoing basis. Given the importance of the topic and the potentially serious legal and reputational consequences of a breach, it is essential to keep abreast of the latest measures and any guidance issued by the Swiss government. We are monitoring these developments closely.

At this juncture, the introduced restrictions raise a number of interpretation and implementation questions. Some of those questions are expected to be clarified based on EU sanctions guidance and FAQs, if any, whereas other issues will require formal confirmation from SECO. We are working with our clients to clarify the expectations of competent authorities and to find practical solutions for an efficient operational implementation of the sanctions framework.

7. Useful links

Given the fluid nature of the sanctions, we enclose some relevant resources which we trust will be of assistance for monitoring the developments:

7.1. Swiss Sanctions

UKRO, as of 30 October 2025

• Official publication:
  • UKRO German version
  • UKRO French version
  • Unofficial English translation
  • Redline against the version of 15 May 2025 (English)

SECO FAQ, as amended on 30 October 2025

• Official publication:
  • German version
  • French version
  • Unofficial English translation
  • Redline against the version of 22 May 2025 (English)

7.2. EU Sanctions

• Consolidated texts of sanctions regulations
  • Consolidated text of Regulation (EU) No 833/2014 (Russia)
  • Consolidated text of Regulation (EU) No 269/2014 (Ukraine territorial integrity)
• Compilation of frequently asked questions regarding EU sanctions available here: link.

Please do not hesitate to contact us in case of any questions.

You may reach out to your usual contact at our firm or direct any sanction-specific queries to our dedicated task force at sanctions@lenzstaehelin.com.

You will find a summary of some of the recent work conducted by our sanctions task force – including advice on sanctions compliance, assistance with the review and implementation of internal policies and procedures, support with monitoring regulatory developments and guidance across sectors such as trading, shipping, industrial and luxury goods, as well as our involvement in internal audits and reviews aimed at helping clients assess and strengthen their sanctions compliance frameworks – in a two-page document available here.