War in Ukraine - Solidarity must lead to Action
Our demands to the Federal Council and Swiss Parliament:
1. No support for the Russian war in Ukraine
As the largest commodity trading hub, Switzerland must advocate for the EU to extend sanctions to all imports of and trade in Russian oil and gas – and immediately and rigorously adopt such sanctions.
2. Comprehensive regulation of the commodity trading sector
As the world's largest trading hub for Russian oil, gas and grains, Switzerland must finally establish a supervisory authority for this high-risk sector. In doing so, Switzerland would be able to ensure transparency, for example, in relation to beneficial owners, i.e., the actual owners of commodity traders as well as that the commodities traded do not originate from conflict zones or countries subject to international sanctions.
Furthermore, Switzerland must ensure that Swiss-based traders live up to their responsibility and carry out appropriate due diligence to ensure they respect human rights and the environmental standards wherever they operate.
3. Commitment to global food security
Together with other countries, Switzerland must strive to ease any food insecurity in the global south caused by the Russian invasion of Ukraine and the subsequent sanctions. This should include showing immediate support and providing significant contributions to internationally coordinated initiatives such as the «Global Crisis Response Group on Food, Energy and Finance» as announced by UN Secretary-General António Guterres.
4. Parameters for human rights-compliant foreign trade policies
The current situation demonstrates once again the lack of clear political guidelines in Switzerland regarding foreign trade with totalitarian regimes. Switzerland urgently needs to establish a legal basis which allows for the creation of such guidelines on foreign trade. This is another reason why, for some time now, Public Eye has been calling for a comprehensive foreign trade law (Aussenwirtschaftsgesetz).
5. Active implementation of sanctions in Switzerland
Switzerland is a particularly attractive destination for Russian oligarchs, many of whom have now been sanctioned. Therefore, the Swiss authorities, like their partners abroad, must actively and jointly with their partners, search for the assets of these sanctioned persons. Moreover, Switzerland needs to create a task force of experts from the Federal Department of Finance, the Financial Market Supervisory Authority FINMA, the Money Laundering Reporting Office MROS, the State Secretariat for Economic Affairs SECO, the Federal Prosecutor's Office as well as the cantonal authorities, aimed at actively identifying and blocking the oligarchs' assets. The networks of sanctioned persons, such as their family members and business partners, must be included in these efforts.
6. Strengthening anti-money laundering
It is well known that the same networks are often used to launder assets of illicit origin and to evade sanctions. So-called shell companies and other legal instruments play a central role in concealing such funds and their actual ownership structure. There are major shortcomings in the instruments available to Switzerland to combat money laundering and financial crime. Concretely, Switzerland needs to introduce:
A public register of "Beneficial Owners" (i.e., the true owners) of companies, so as to create transparency regarding the ownership structure of shell companies. This is another area in which Switzerland is lagging behind: in 2018, the EU introduced the obligation for its member states to establish such a register and the Financial Action Task Force (FATF) reviewed its corresponding Recommendation 24 in March 2022.
Extend due diligence requirements in the Anti Money Laundering Act (AMLA) to consulting activities related to the establishment and management of shell companies, including for lawyers. This would finally introduce obligations to ensure they cease helping oligarchs hide their assets in Switzerland.
Our demands with respect to commodity traders:
Commodity traders must
disclose their relationships with governments and state-owned businesses. This involves transparency about any business relations with Russian companies and the extent of any current business activity in Russia.
disclose their payments to governments and state-owned businesses as part of their trading activities.
position themselves publicly and clearly against the Russian invasion of Ukraine.
2. Enhanced and comprehensive due diligence
Commodity traders must carry out comprehensive human rights and environmental due diligence in accordance with the United Nations Guiding Principles on Business and Human Rights. The sector-specific implementation is set out in the Swiss Commodity Trading Sector Guidance as well as in the OECD-FAO Guidance for Responsible Agricultural Supply Chains.
Enhanced due diligence is imperative for business activities in, and with, countries affected by conflicts. Companies must continuously analyse the human rights impact of their business activities by means of clear and transparent processes. With regard to the current conflict, for most companies this is likely to result in a drastic reduction of their business activities or even a complete withdrawal. In this regard, companies must ensure they do not infringe on the labour rights of their employees. At the same time, they must prevent playing into the hands of the belligerent regime, both economically and politically, as well as undermining the effect of the sanctions.
Oil and gas traders must be aware of the consequences of any (business) partnership with authoritarian regimes. Russia profits directly from the export of its oil and gas. At the latest since the invasion of Ukraine by the Russian army on 24 February 2022, which represents a blatant violation of international law, no more payments should have been made into Russia's war chest.
3. Contributing to global food security
Commodity traders must also contribute to ensuring global food security. This includes, mainly, avoiding the exploitation of volatile commodity prices, so as not to contribute to speculation which can drive up food prices even higher.
They should also contribute to internationally coordinated initiatives such as the Global Crisis Response Group on Food, Energy and Finance, as announced by UN Secretary-General António Guterres, aimed at facilitating the rapid supply of food to import-dependent countries.