After a two-century old neutrality, Switzerland decided to join the rest of the European Union in the seizure of Russian held assets.
The war in Ukraine truly seems to have broken all the rules of neutrality in Europe. Countries that remained neutral even during the horrors of the World Wars now jumped against Moscow’s actions.
A classical example is Sweden and Finland, historically neutral against Russia for different reasons, which both decided to join NATO following the invasion of Ukraine.
A particularly interesting case, however, is Switzerland. The Helvetic Republic has been neutral in any conflict since 1847. They were not invaded by Nazi Germany in WWII, they did not join NATO during the Cold War, they did not join the European Union.
The only exception so far was the entry of Switzerland in the Schengen Area, a space where people can travel freely without passports.
Switzerland always exploited its neutral stances to attract rich investors from any side. Billions of assets from Europe, the United States, China, the Middle East and yes, even Russia, have flowed into Switzerland over the years.
To do so, Switzerland also lowered national taxes and often turned a blind eye to other nations’ atrocities.
However, since Russia invaded Ukraine in February 2022, Switzerland was increasingly pressured to join the West in the retaliations against Moscow. And this is how Swiss neutrality increasingly came to an end.
Swiss sanctions and seizure of Russian assets
During 2022, Switzerland joined every sanction package against Russia approved by the European Union. Then, Switzerland also jumped on the G7/EU price cap on Russian oil.
Now, the United States and Europe want Switzerland to seize Russian assets within their country. This is a legal battle that the rest of Europe has already engaged in 2022, seizing dozens of billions in private and public Russian assets.
Already by May, Brussels had frozen $24 billion in assets owned by Moscow’s Central Bank, leading Russia to a technical default.
Switzerland has seized about $8 billion in Russian assets, not much considering the entire Russian properties in the country are estimated to be $200 billion.
2% of the Russian Central Bank’s reserves are currently in Switzerland, however most of these assets are privately owned. This endures a legal justification for their seizure and makes the ordeal very politically sensitive.
However, Switzerland finally decided to start an ad hoc group for the creation of such justification, a move welcomed by EU and US alike. “I hope the law encourages the Justice Department to redouble its kleptocrat asset seizure efforts, and our European allies to follow suit,” said US congressman Tom Malinowski.
With Switzerland, the last piece of neutrality on the European continent falls. Except for a few outsiders, most of the continent is against Russia.
