After Switzerland largely followed the EU sanctions against Russia and Belarus, Swiss companies are also subject to trade restrictions. Whether companies and goods in the packaging industry are affected must be considered on a case-by-case basis. The SVI provides information on the general provisions here.
Already after Russian President Putin recognized the People’s Republics of Donetsk and Luhansk on February 21, 2022, the EU February 23, 2022 expanded the existing catalog of sanctions and at the same time issued a new embargo regulation. Both became after the military invasion of Ukraine on 24 February 2022 and has been steadily expanded to this day by several further rounds of sanctions. The current status is published by the State Secretariat for Economic Affairs (SECO) (see box). The Swiss measures are based on the Federal Council decision of February 28, 2022 to adopt the EU sanctions.
In the area of goods measures, the focus is primarily on bans on dual-use goods that could also be used for military purposes. The products of the packaging industry should not be directly affected here. In the area of financial measures, however, the restrictions are also affecting the packaging industry because payments for deliveries are made more difficult or impossible. There are now bans related to transactions with the Central Bank of Russia, bans on granting loans to Russian companies, bans on taking deposits over 100,000 francs, and bans on financing, equity investments and certain services. There are also travel sanctions for Russian and Belarusian nationals from the non-military sector.
Legal consequences in practice
The most far-reaching restriction in commercial transactions with Russia and Belarus is likely to be the so-called “provision ban”. Accordingly, certain natural or legal persons, institutions or organizations “may not be made available or benefit from funds or economic resources, either directly or indirectly”. This includes assets of all kinds, regardless of whether they are tangible or intangible, movable or immovable, i.e. all commercial goods.
In addition to new business, the sanctions by law also directly affect existing contractual relationships. They hinder or make impossible the undisturbed continuation of the agreed exchange of services, both with regard to goods and cash flows. This leads to violations of existing contracts with the corresponding legal consequences, even if both parties have no influence on them. For Swiss companies, the question arises as to how and whether they can free themselves from their contractual obligations, even if they don’t really want to.
In any case, the Swiss entrepreneur is obliged according to the principles of good faith to inform the contractual partner that and why he will not be able to provide his services in the future. According to Swiss law, a legal transaction that violates a legal prohibition is void, or a contract is void if it has illegal content (Art. 19 Para. 2 OR and Art. 20 OR and Art. 27 ZGB). There is no doubt that the Russia/Belarus embargo is a prohibition law. A contract falling under this could therefore already be ineffective by operation of law. A consequence of nullity is therefore to be assumed from the day on which the state sanctions come into force. There is no reason to fear that the sanctions will have repercussions on transactions that have already been completed.
What applies to current transactions?
Here the individual case must be considered and which law is applicable to the contract. If deliveries become impossible because they are prohibited, the company also loses the right to the consideration, i.e. the contractually agreed payment. Unless deliveries are prohibited under the relevant sanctions, they can still be made today. Whether subsidiaries of a Swiss parent company that are active in Russia are allowed to continue working must be considered on a case-by-case basis. In principle, a Russian subsidiary is an independent legal entity and is not bound by EU or Swiss law. However, in principle, Swiss or EU citizens in the service of a Russian subsidiary affected by the sanctions may no longer work for it.
Inquiries for affected persons or companies: email@example.com, Tel. 058 464 08 12
For questions about goods sanctions: Export Controls / Industrial Products Department: Tel. 058 462 68 50