Swiss to decide case by case on Russian commodity deals

ZURICH, Switzerland – Switzerland will decide case by case whether to curtail traders’ purchases from Russia’s state-controlled companies under European Union sanctions Bern has adopted that limit commodity deals to those deemed “strictly necessary” from mid-May, the government agency in charge of sanctions said on Tuesday, April 19.

Major global trading houses are planning to reduce crude and fuel purchases from state-controlled Russian companies such as Rosneft and Gazpromneft as early as May 15, sources told Reuters last week, to avoid falling foul of European Union sanctions on Russia.

“According to Article 24a paragraph 2 letter a of the Ordinance on Measures in Connection with the Situation in Ukraine (SR 946.231.176.72), the ban on transactions with state-owned enterprises does not apply to transactions that are strictly necessary for the purchase, import, or transport of various raw materials to Switzerland or an EEA member state,” the State Secretariat for Economic Affairs (SECO) said in response to a Reuters question.

“In Switzerland, too, it must ultimately be decided individually in each case whether a transaction is ‘strictly necessary’ or not,” it said.

The EU has not imposed a ban on imports of Russian oil in response to Russia’s invasion of Ukraine, because some countries such as Germany are heavily dependent on Russian oil and do not have the infrastructure in place to swap to alternatives.

Trading companies are, however, winding down purchases from Russian energy group Rosneft as they seek to comply with language in existing EU sanctions that were intended to limit Russia’s access to the international financial system, sources told Reuters last week.

The wording of EU sanctions exempts oil purchases from Rosneft or Gazpromneft, which are listed in the legislation, deemed as “strictly necessary” to ensure Europe’s energy security.

Switzerland is a major hub for trading Russian commodities. – Rappler.com