On August 22, Reuters reported that during the second quarter of 2018, the Swiss-based global financial institution Credit Suisse froze approximately 5 billion Swiss francs ($5 billion) of money linked to Russia to avoid running afoul of U.S. sanctions against Russia. The Credit Suisse freeze is noteworthy for two reasons, as explained in the article. First, “[i]t is rare for a Swiss bank to reveal such details.” Second, “[w]hile U.S. sanctions do not apply to neutral Switzerland, its banks are obliged to follow suit because they depend on access to the dollar and could be blackballed by the United States for any missteps.” The article, citing Russian central bank data, reported that approximately $6.2 billion (14 percent of total Russian cross-border outflows) “went to Switzerland in 2017 — almost three times as much as went to the United States.”
The Swiss Financial Market Supervisory Authority (FINMA) publicly states that “Switzerland implements and enforces internationally imposed sanctions against states, individuals and legal entities,” using the Embargo Act as its legal basis. With regard to sanctions by individual countries, FINMA has shown, notably in its 2014 enforcement action against BNP Paribas (Suisse) SA, that it considers Swiss banks to have a duty to identify, limit, and monitor the risks involved in making transactions with business partners in countries subject to U.S. sanctions and will hold a bank responsible for exposing itself “to unduly high legal and reputational risks.”
Dipping Through Geometries 