Dhe Switzerland is making itself unpopular. This is tricky for the small but economically strong country, especially since it is friends who are increasingly annoyed. It is the western partners who are dissatisfied with Switzerland’s only lukewarm commitment in the fight against the Russian aggressors and their allies.
In Berlin, Paris, London and Washington, nobody expects the Confederates to give up their neutrality and join NATO, under whose protective umbrella they are not formally but actually. But the fact that the Federal Council, as the government in Bern is called, is making no move to amend the antiquated Swiss War Material Act to such an extent that at least democratic countries are allowed to pass on armaments originally obtained from Switzerland to the Ukraine, which is struggling to survive, causes a shake of the head.
Kyiv is angry, Berlin irritated
The Federal Council even banned the sale of 96 old Leopard 1 tanks to Rheinmetall. The armaments group wanted to acquire the vehicles that were once produced in Germany, which the Swiss state defense technology company Ruag only uses as trading objects and spare parts warehouse, and then deliver them to the Ukraine. The veto from Bern runs counter to Ukraine’s successful self-defense and has understandably angered the government in Kiev. The German federal government avoids harsh tones, but is also irritated.
The suppressed transfer of weapons is by no means the only bone of contention. The Western allies also accuse Switzerland of only half-heartedly implementing the sanctions against Russia. In the spring, the ambassadors of the G7 states and the EU wrote the Swiss Federal Council a scathing letter that had been coordinated for months between the governments involved, i.e. it came from the highest authorities. In it, they called on Switzerland to close the existing loopholes in the sanctions system and to join the international task force that is trying to join forces to track down the funds from Putin’s aides.
The driving force behind this concerted action was the Americans. They are particularly bothered by the fact that in Switzerland, where rich Russians are believed to have stashed away up to 200 billion francs, Russian funds totaling only 7.5 billion francs have been frozen so far. As the largest offshore financial center in the world, Switzerland should finally close the legal loopholes that make it easier for rich people to hide their assets and avoid sanctions.
There is also a lack of transparency in commodities trading
Swiss trustees and lawyers tinker for their clients widely ramified (letterbox) company networks in which they hide their belongings. The Americans have already put individual Swiss financial intermediaries suspected of money laundering on their sanctions lists. In their Swiss homeland, you can hardly get at them because they use a loophole in the Money Laundering Act and are protected by attorney-client privilege.
A further complication is that in Switzerland, unlike in the EU, there is no register in which the beneficial owners of each company are to be entered. The Ministry of Finance in Bern is working on a law for such a register. However, it will be years before this comes into force.
There is also a lack of transparency in commodities trading, in which Switzerland, which has few commodities, has advanced to become the leader thanks to low taxes and weak regulation. The fact that lucrative deals with Russian raw materials are being conducted via Geneva and Zug increases the suspicions of the Americans in particular. They have sent a special employee to Bern to monitor sanctions, and the American ambassador bluntly holds up the mirror to the Swiss at every opportunity.
Despite the growing pressure, the Federal Council is ducking. The representatives of the other parties do not want to present the right-wing conservative Swiss People’s Party, which insists on a strict interpretation of neutrality and rejects any sanctions against Russia, before the parliamentary elections in October.
But this passivity can take revenge, as history shows. In the case of banking secrecy and dormant assets, the Swiss government once thought they could just sit out international criticism. Instead, the Americans carried it with all their might to hunt.