Lindemann Law

Lindemann Law

How to unblock bank accounts that are not subject to Swiss, EU and US Sanctions?

CASE STUDY 1

You are a Russian national living in Russia (or outside of the EU / EEA / Switzerland), not subject to the EU / Swiss / US sanctions, however, a Swiss / EU bank has frozen assets on your bank account.

What are the limitations on bank accounts for Russian nationals? 

✓ Swiss and EU banks are prohibited to accept any new deposits from Russian nationals, if the total value of deposits  per credit institution exceeds EUR 100,000. This rule does not apply to Russian nationals who are also Swiss/EU/EEA nationals or holders of the Swiss/EU/EEA temporary or permanent residence (Art. 5b, EU Regulation 833/2014).
✓ No restrictions for outgoing payments.
✓ EU FAQ: If you are not a designated person in the EU/Switzerland, there is no reason for a bank to restrict your account based on your Russian nationality or on the recent geopolitical conditions.
✓ If you already had a balance on your account prior to February 2022, which is higher than EUR 100,000, your deposit is grandfathered, i.e. you are allowed to keep it and do what you want with it (withdraw or leave the way it is) (EU FAQ).


What to do?

STEP 1. Legal opinion addressed to banks stating the EU/ Swiss regulations)

STEP 2. Application to SECO/EU authorities (may take long, since there is no national interest)

STEP 3. Claim to Swiss/EU court

✓ Swiss/EU banks have to comply not only with Swiss/EU sanctions  but also with those of other countries, such as US and UK.

✓ Important to distinguish which US  sanctions apply to them and in which cases.

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CASE STUDY 2

You are a Russian national, not subject to any Swiss, EU or US sanctions,  but your relative (parent, spouse, child, sibling…) is designated in the US (included in the SDN list), a Swiss/EU bank has frozen your bank account. 

Does SDN listing of your relative apply to you?

✓ By operation of law, the sanctions designation of a person,  does not transmit to his/her parent, spouse, child.
✓ If such non-designated family members act for or on behalf of the designated relative, such activity may incur sanctions-related risk.
✓ Facts need to be analysed: E.g. when an account was initially set up for the benefit of a non-designated person (e.g.: spouse and children of a designated person).

✓ Are Swiss/EU banks prohibited from executing transactions for or on behalf of a spouse or children of designated persons by secondary sanctions? Not under Executive Order 14024.

What to do?

STEP 1. Legal opinion addressed to banks stating the EU / Swiss regulations. Legal opinion from a US lawyer with respect to US sanctions.

STEP 2. Is it possible to get a confirmation from OFAC? If no US person / US assets/US territory are involved, OFAC does not have a jurisdiction and will not issue any licenses or confirmations.

STEP 3. Claim to Swiss / EU court which will apply US law.

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CASE STUDY 3

You are a Russian national, not subject to any Swiss, EU sanctions but you are designated in the US: a Swiss / EU bank has frozen your bank account.

Do U.S. sanctions apply to Swiss/EU banks?

Primary sanctions: US nexus is required

✓ All property in the US or in the possession of a US person has to be blocked.
✓ May apply to non-U.S. persons if a transaction with a sanctioned person occurs in the US or involves a US person (e.g. a Swiss bank (FFI) processes a transaction with a sanctioned person through a U.S. bank (US nexus).

✓ Give rise to civil and criminal penalties.

Do Swiss/EU/Liechtenstein banks need to block my account?

✓ If the assets are physically located in the EU/Switzerland, US jurisdiction attaches by way of a US person (e.g., an asset manager), or a connection to the US (e.g.: U.S. dollar-clearing, US securities, US custodian).

✓ Facts need to be analysed: US dollars, US securities, Euros, Swiss Francs, securities of EU issuers, precious metal account.
✓ If no US jurisdiction hook, OFAC does not have jurisdiction and cannot “license” any transaction.

 

Secondary sanctions: no US nexus is required

✓ Do not require US nexus and direct non-U.S financial institutions (FFIs) not to engage in certain transactions.
✓ Target specified activities that do not involve US persons.
✓ Give rise to limitation on access to the US financial system.
✓ E.O. 14024 authorizes secondary sanctions only for certain transactions with respect to certain SDNs: involving Russias’ military industrial base.

What to do?

STEP 1. Legal opinion addressed to banks stating the EU / Swiss regulations. Legal opinion from a US lawyer with respect to US sanctions.

STEP 2. Is it possible to get a confirmation from OFAC? If no US person / US assets/US territory are involved, OFAC does not have a jurisdiction and will not issue any licenses or confirmations.

STEP 3. Claim to Swiss / EU court which will apply US law.

News and insights

EU Sanctions : Criminal Penalties for Violation and Circumvention

How to Unblock Bank Accounts and Russian Securities for the Individuals that are not Subject to Swiss, EU and US Sanctions?

Understanding EU 13th Sanctions Package & US OFAC Measures – How to comply with extraterritorial reach?

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