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Russia–Switzerland relations

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Russia–Switzerland relations
Map indicating locations of Russia and Switzerland

Russia
Switzerland

Russia–Switzerland relations are foreign relations between Russia and Switzerland. Switzerland opened a consulate in Saint Petersburg in 1816, upgrading it to a legation 90 years later. The two countries broke off diplomatic relations in 1923, when Russia was going through a period of revolutionary turmoil – and they were not resumed until 1946.

History

Imperial Russia and Switzerland

Suvorov's army crosses the Swiss Alps (1799)
Monument near Andermatt (2015)

Contacts of some consequence between the Swiss and the Russians started as early as the 17th century, when a twenty-year-old Swiss soldier François (Franz) Lefort came to Moscow in 1675 to serve the Romanov Dynasty, and soon reached a position of prominence. Although Czar Peter I was crowned while still a child (1682), it was Peter's sister Sophia, and later his mother Nataliya Naryshkina, and their boyar relatives, who were running the country for over a decade after - leaving young Peter with plenty of time to dream of how to change his country when he has real power. Lefort happened to be one of the people who greatly influenced the young Czar's world view, and, once Peter became fully in charge of the country, the Swiss soldier became one of his top advisers and became highly influential during the first several years of Peter's modernization campaign.

Even though Lefort died fairly early in Peter's reign (1699), quite a few other Swiss soldiers, adventurers, educators, and scholars made a contribution in the history of Russian Empire. The Swiss-Italian architect Domenico Trezzini was the general manager of the construction of Saint Petersburg until 1712,[1] and is credited with the creation of Petrine Baroque, characteristic of that city's early architecture. The mathematician Leonhard Euler and five members of the Bernoulli family became members of the Saint Petersburg Academy of Science. A century after Lefort, Frédéric-César de La Harpe was influential in the upbringing of the future Czar Alexander I.

The first large-scale appearance of Russians in Switzerland dates to the early years of the Napoleonic Wars, when Suvorov's army fought back and forth across Switzerland and northern Italy in 1799–1800. While the results of these campaigns were inconclusive, they earned Suvorov the rank of Generalissimo, and became (in particular, the retreat over Panix Pass) a favorite topic for Russian painters.

To reciprocate, around 8,000 Swiss men joined Napoleon's army that invaded Russia in 1812. Only a few hundreds survived the disastrous campaign. The heroism of the Swiss at Berezina is immortalized in the Beresinalied.

Lenin's stay in Switzerland commemorated at Spiegelgasse 14, Zürich

In the 19th century Switzerland became a popular refuge with Russian anti-Czar émigrés, due to its culture of freedom, absence of a particularly close relationship between the Swiss republican government and that of Imperial Russia, and on occasions, its neutrality in wars as well. The list of Russian exiles who found shelter in Switzerland runs from Alexander Herzen, who became Swiss citizen[1] in 1851, to Vladimir Lenin, who stayed in Switzerland during World War I, and was only able to leave the country in 1917 thanks to the so-called sealed train.[2][3]

The same reasons made the country a magnet for Russian students. The number of Russian students in Switzerland peaked in 1906–07, just after the defeat of the Russian Revolution in 1905, when 36% of all university students in Switzerland were Russians (2,322 out of the total of 6,444).[1] Not only the majority of all foreign students enrolled in Swiss universities that year (there were 3,784 of them[4]) had come from Russia, over two-thirds of these Russian students (1,507 of 2,322) were female mostly because of the Russian educational qualification for the Jewish population.[5]

Modern Russia and Switzerland

After the dissolution of the Soviet Union, the number of Russian visitors and migrants to Western Europe increased significantly, compared to the Soviet period. However, for most of them Switzerland remained somewhat of a flyover country on the way to the more popular Mediterranean destinations.[6]

The tranquility turned into tragedy on 1 July 2002, when a Bashkirian charter flight collided with a DHL cargo plane just before entering Swiss air space from Germany. All 71 people aboard the two aircraft died in the collision. Having lost his entire family, Vitaly Kaloyev killed the air traffic controller, Peter Nielsen, whom he deemed responsible for the accident.

Russia has allegedly sent several spies to Switzerland over the years. In 2018, a confidential intelligence report compiled for the Swiss government found that one in four Russian diplomats based in Switzerland is a spy.[7][8]

Russian spies had also allegedly targeted a laboratory in Spiez in 2018 that was testing the nerve agent used on Sergei Skripal.[9]

In 2020, the Swiss police made the public aware that two "Russian spies", one of whom was disguised as a plumber, had travelled to Davos with diplomatic passports prior to the Annual Meeting. The Russian Embassy in Bern denied having carried out "preparatory work" for spying on the World Economic Forum.[10][11]

In June 2021, Switzerland hosted the 2021 Russia–United States summit, in Geneva.

Sanctions against Russia 2022

See also: International sanctions during the 2022 Russian invasion of Ukraine § Switzerland

Following the 2022 Russian invasion of Ukraine, Switzerland decided to adopt all EU sanctions against Russia.[12] According to the Swiss President Ignazio Cassis, the measures were "unprecedented but consistent with Swiss neutrality". The administration also confirmed that Switzerland would continue to offer its services to find a peaceful solution in the conflict. Switzerland only participates in humanitarian missions and provides relief supplies to the Ukrainian population and neighbouring countries.[13] In total, about 870 people and more than 60 companies are subject to Swiss sanctions.[14] Switzerland closed its airspace to Russian aircraft in March 2022.[15] According to a 2022-security survey, 77% of Swiss feel it is right for Switzerland to support sanctions against Russia.[16] Switzerland has officially called for the return of Crimea and all occupied Ukrainian territory back to Ukraine.[17]

Russia's ambassador to the United Nations in Geneva expressed his disappointment and stressed the previously excellent relations between the two nations. On 6 March 2022, Russia has listed Switzerland as a country that has taken "unfriendly actions" against Russian citizens. Russia will require additional controls for Swiss-Russian businesses in the aftermath of the severe sanctions Switzerland imposed on Russian entities.[18]

The Russian elites had stored billions of rubles of assets in Swiss banks. As the sanctions were imposed they shifted some of it to countries that do not impose sanctions like the UAE.[19]

In August, Russia turned down an offer from Switzerland to represent Ukraine’s interests in Moscow, after Ukraine agreed on a mandate for Switzerland to represent its interests in Russia. A Russian foreign ministry spokesman said the plan was not acceptable as it does not consider Switzerland to be a neutral country after Bern joined sanctions against Russia.[20]

Swiss President Ignazio Cassis spoke briefly with Russian foreign minister Sergey Lavrov after the 77th UN General Assembly Meeting in NYC on 22 September 2022. Mr. Cassis told the assembly earlier that Switzerland would not recognize the result of the referendums in the disputed Donbass regions of Ukraine. Mr. Lavrov told Cassis that Switzerland had left the path of neutrality because of sanctions. Cassis reiterated Switzerland's neutral position by not participating militarily in the conflict.[21][22]

Leading Russian opposition figures, including financier Bill Browder, have criticised Switzerland by saying the country is not doing nearly enough, while granting Russia too many loopholes in commodities trading, real estate investing or banking sector.[23][24]

Resident diplomatic missions

At the end of 2018, there were 732 Swiss nationals living in Russia.[25] As of 2020, 16,500 Russian nationals lived in Switzerland.[26] There are 70,000 Russian speakers in Switzerland (2022).[27]

  • Embassy of Russia in Bern
    Embassy of Russia in Bern
  • Consulate-General of Russia in Geneva
    Consulate-General of Russia in Geneva
  • Embassy of Switzerland in Moscow
    Embassy of Switzerland in Moscow
  • Consulate-General of Switzerland in Saint Petersburg
    Consulate-General of Switzerland in Saint Petersburg

Trade

Russia is Switzerland's 23rd largest trading partners with a trade volume of $5.1 billion. Russia accounts for 1% of Swiss exports and 0.4% of Swiss imports.[30] Switzerland mainly exports medicines, medical products, watches and machinery to Russia, while the chief imports are gold, precious metals and aluminum.[31]

Switzerland is a major hub for commodities trading globally. As such, about 80% of Russia’s commodity trading goes through Geneva and with a further estimated 40 commodities companies linked to Russia in Zug.[32] Gunvor, Vitol, Trafigura and Lukoil Litasco SA are oil and commodities trading firms with stakes in Rosneft and Lukoil, two major Russian oil companies.[33][34][35] Paramount Energy, Amur Trading, Cetracore and Mercantile & Maritime are reportedly also active players in this sector.[36]

MMK (a Russian-based company in Lugano) is a major player in the commodities/steel trading with Eastern Europe.[37] EuroChem and SUEK are respectively two major Russian fertilizer and coal companies with a subsidiary in Zug.[36] KSL, another Russian coal company linked to President Putin with offices in Zug, has been banned from operating in Switzerland since September 2022.[38]

The headquarters of Russia's Nord Stream 2 pipeline project linking Russia with Germany are in Switzerland. In March 2022, the company had to lay off 140 people due to economic sanctions against Russia.[33][39]

Gas makes up roughly 15% of Switzerland’s final energy consumption. Around half of this comes from Russia (via Germany).[40] Russia supplies only 0.3% of Swiss imports of crude oil.[36]

Switzerland is also a major hub for Russian (and Ukrainian) grain and vegetable oil trading.[41]

Sberbank, Gazprombank and VTB Bank have a branch in Switzerland, the largest recipient of Russian private capital.[42] Between $5 billion and $10 billion of private Russian money flows through Switzerland every year.[33]

According to the Neue Zürcher Zeitung, the amount deposited in Swiss banks by Russian nationals amounts to some $150 billion but according to the Bank of International Settlements, Russian nationals have only ~$11 billion deposited in Swiss bank accounts.[43] When including brokerage accounts, other investments and assets held through offshore accounts, the estimated amount was between $100 and $300 billion in 2022.[44] According to the Swiss Bankers Association in 2022, the amount held by Russian clients in Swiss banks is between $160 and $214 billion.[45]

As of March 2022, $6.2 billion of Russian money was frozen by the Swiss authorities.[46] The Helsinki Commission (a United States influential commission) has accused Switzerland of “helping hide [Russian] funds” and accuses lawyers in Switzerland of being the “enablers”. The Swiss Federal Council has objected to this characterization.[47]

The business association Economiesuisse informed that its sanctions against Russia would have a limited effect on the Swiss export economy. However, KOF (a Swiss economic research institute) reported that in case of tougher sanctions in the future, like for example a gas and oil ban, Swiss gross domestic product (GDP) would fall by 3-4 percentage points, spread over two years.[48][31]

200 Swiss companies employing some 40,000 people in Russia have registered with the Swiss Embassy in Moscow.[49] Some of these companies, such as ABB, Holcim, Sulzer and Nestlé, have suspended or significantly reduced their operations in Russia, while Christoph Blocher's EMS-Chemie continues "business as usual".[30][50][51][49][52]

Up until 2022, Switzerland was a significant importer of Russian gold that was destined for refineries or jewelry production. Since August 2022, buying, importing or transporting gold and gold products from Russia are banned because of the sanctions.[53][54]

Russian investments represent only 1% of annual foreign direct investment into Switzerland (2022).[55]

As of December 2021, Credit Suisse had about $900 million credit exposure to Russia while UBS had only $200 million exposure to Russian assets.[56] Other sources say UBS had $634 million “at direct risk” in Russia and Credit Suisse $1.7 billion.[57]

About 4% (i.e. $33 billion) of Credit Suisse wealth management business is with rich Russian clients.[58][59]

Swiss pension funds have on average between 0.3% and 0.5% of assets invested in Russia.[57]

In 2019, Russian visitors represented 1.7% of hotel nights in Switzerland.[31]

Individuals

Sergei Mikhailov, a Russian businessman and alleged leader of the “Solntsevskaya Bratva” criminal syndicate was arrested in Geneva in 1996 and incarcerated for two years.[60][61]

Swiss police arrested Russian businessman Vladislav Klyushin while enroute to Zermatt in 2021 and extradited him to the United States on charges of commercial espionage.[62]

Known Russian oligarchs living in Switzerland are Viktor Vekselberg (Renova Group), Alisher Usmanov (USM) and Gennady Timchenko (Gunvor/Volga Group). The Swiss government has extended EU sanctions onto these individuals after the 2022 Russian invasion of Ukraine.[44] Switzerland further imposed travel bans on five unnamed Russian oligarchs with close ties to President Putin.[63]

Andrey Melnichenko (MDM Bank) reportedly lives in St-Moritz.[64]

Dmitry Pumpyansky (OAO TMK/Sinara Group) reportedly lives in Geneva with his family.[65]

Petr Aven (Alfa-Bank) has reportedly a residence in Bern.[66]

According to United States and European security officials, Alina Kabaeva has spent long periods of time in Switzerland since 2015, at residences in Lugano and Cologny.[67] In March 2015, she was reported to have given birth to a daughter at the VIP hospital of Saint Ann in Ticino, Switzerland.[68][69] Kabaeva has been sanctioned by the United States, the European Union and the United Kingdom.[70]

In addition, about 85 Russian nationals held “Golden Visas” in Switzerland in 2022.[66]

See also

Notes and references

  1. ^ a b c "Bilateral relations Switzerland–Russia". Swiss Government portal. 8 February 2022. Retrieved 2 March 2022.
  2. ^ Ted Widmer (20 April 2017). "Lenin and the Russian Spark". The New Yorker. Retrieved 26 November 2019.
  3. ^ Joshua Hammer (2017). "Vladimir Lenin's Return Journey to Russia Changed the World Forever". Smithsonian. Retrieved 26 November 2019.
  4. ^ Chisholm, Hugh, ed. (1911). "Switzerland § Education" . Encyclopædia Britannica. Vol. 26 (11th ed.). Cambridge University Press. pp. 244–245.
  5. ^ "Censorship in the Russian Empire". www.yivoencyclopedia.org.
  6. ^ Switzerland is a party to IASTA, and generally allows overflight of its territory by other countries' civil aircraft. (International Air Services Transit Agreement - list of signatory states)
  7. ^ "Swiss police found 'Russian spies' in Davos last year". The Guardian. 21 January 2020. Retrieved 9 March 2022.
  8. ^ "Mystery surrounds Swiss arrest of suspected Russian spy". swissinfo. 16 February 2020. Retrieved 9 March 2022.
  9. ^ "Switzerland Demands Russia 'End Illegal Activities' After Two Suspected Spy Cases". RadioFreeEurope/RadioLiberty. 17 September 2018. Retrieved 27 March 2022.
  10. ^ "Swiss police 'exposed Russian spies in Davos'". BBC. 21 January 2020.
  11. ^ "Swiss police found 'Russian spies' in Davos last year". the Guardian. AgenceFrance-Presse. 21 January 2020.
  12. ^ Allen, Matthew (4 March 2022). "Switzerland triggers wide range of sanctions against Russia". swissinfo. Retrieved 7 March 2022.
  13. ^ "Switzerland adopts EU sanctions against Russia". Swiss Government portal. 28 February 2022. Retrieved 7 March 2022.
  14. ^ "Swiss extend blacklist over Russia's invasion of Ukraine". swissinfo. 16 March 2022. Retrieved 19 March 2022.
  15. ^ "Forget Londongrad: Switzerland in Focus as Sanctions Target Rich". swissinfo. 2 March 2022. Retrieved 19 March 2022.
  16. ^ "War in Ukraine leads Swiss to rethink security issues". SWI swissinfo.ch. 14 July 2022. Retrieved 20 July 2022.
  17. ^ "Switzerland calls for return of Crimea to Ukraine". SWI swissinfo.ch. 23 August 2022. Retrieved 23 August 2022.
  18. ^ "Russia issues list of 'unfriendly' countries amid Ukraine crisis". AlJazeera. 8 March 2022. Retrieved 8 March 2022.
  19. ^ "Russia's rich look to stash wealth in Dubai". Reuters. 10 March 2022. Archived from the original on 13 March 2022. Retrieved 14 March 2022.
  20. ^ "Russia rejects protecting power mandate agreed by Switzerland and Ukraine".
  21. ^ "Switzerland" will not recognise ‘sham’ Ukraine referendums swissinfo. Retrieved 25 Sept 2022.
  22. ^ "Surprise at picture of Cassis and Lavrov in New York" worldradio.ch Retrieved 25 Sept 2022.
  23. ^ "Leading Russian opposition figures criticise Switzerland".
  24. ^ "Bill Browder: Swiss record on fighting money laundering is 'shocking'". SWI swissinfo.ch. 10 October 2022. Retrieved 17 October 2022.
  25. ^ "Authorities advise Swiss citizens to leave Russia". swissinfo. 11 March 2022. Retrieved 19 March 2022.
  26. ^ Sallier, Pierre-Alexandre (17 March 2022). "La guerre transforme les Russes de Suisse en parias". TdG. Retrieved 19 March 2022.
  27. ^ "Russian media in Switzerland: A mix of propaganda and anti-regime critics". SWI swissinfo.ch. 22 April 2022. Retrieved 22 April 2022.
  28. ^ "Bilateral relations Switzerland–Russia". Bundesreisezentrale BRZ. 17 December 2012. Retrieved 28 June 2022.
  29. ^ "Sanctions vs. neutrality: Swiss fine-tune response to Russia". ABC News. 27 February 2022. Retrieved 21 March 2022.
  30. ^ a b Davis Plüss, Jessica (3 March 2022). "Swiss multinationals under pressure to untangle ties with Russia". swissinfo. Retrieved 7 March 2022.
  31. ^ a b c "Neutral Switzerland's economy shaken by sanctions on Russia". France24. 5 March 2022. Retrieved 7 March 2022.
  32. ^ "Russia Inc.'s Swiss Trading Hub Wrestles With 'Dark Side'". SWI swissinfo.ch. 11 March 2022. Retrieved 27 March 2022.
  33. ^ a b c "Switzerland faces pressure to toughen sanctions on Russia". swissinfo. 26 February 2022. Retrieved 2 March 2022.
  34. ^ Stegmüller, Céline (5 July 2021). "Commodity trading in Switzerland, explained". swissinfo. Retrieved 4 March 2022.
  35. ^ Etienne, Richard (18 March 2022). "A Genève, un roi du négoce de pétrole russe vacille". Le Temps (in French). Retrieved 22 March 2022.
  36. ^ a b c Dimanche/gw, Le Matin (26 June 2022). "Traders with Swiss links continue to buy and sell Russian oil". SWI swissinfo.ch. Retrieved 28 June 2022.
  37. ^ Franchini, Federico (1 April 2022). "War and sanctions impact steel traders in Lugano". SWI swissinfo.ch. Retrieved 1 April 2022.
  38. ^ Harari, Antoine (27 August 2022). "Pour éviter l'embargo suisse sur le charbon russe, des sociétés zougoises mettent le cap sur Dubaï". Le Temps (in French). Retrieved 31 August 2022.
  39. ^ "Russia sanctions: Nord Stream 2 fires more than 140 people in Zug". swissinfo. 2 March 2022. Retrieved 2 March 2022.
  40. ^ Change, Olivia (19 March 2022). "What the Ukraine war means for Switzerland's energy policy". swissinfo. Retrieved 19 March 2022.
  41. ^ Dupraz-Dobias, Paula (2 March 2022). "Swiss trading hub adapts to new wartime reality". swissinfo. Retrieved 4 March 2022.
  42. ^ "Russian Bank VTB's Swiss Commodities Unit Lays Off Workers". SWI swissinfo.ch. 10 March 2022. Retrieved 26 March 2022.
  43. ^ Allen, Matthew (3 March 2022). "The Russian oligarchs' billions frozen in Swiss banks". swissinfo. Retrieved 7 March 2022.
  44. ^ a b "Forget Londongrad: Switzerland in Focus as Sanctions Target Rich". swissinfo. 2 March 2022. Retrieved 2 March 2022.
  45. ^ "Russian clients have up to CHF200 billion in Swiss banks". swissinfo. 15 March 2022. Retrieved 19 March 2022.
  46. ^ "Russian asset seizure reaches CHF5.75bn in Switzerland". SWI swissinfo.ch. 24 March 2022. Retrieved 25 March 2022.
  47. ^ "US commission accuses Switzerland of hiding Russian assets". SWI swissinfo.ch. 5 May 2022. Retrieved 5 May 2022.
  48. ^ Keystone-SDA/Sunday papers/ilj (13 March 2022). "Experts warn of hit to economy without Russian oil and gas". SWI swissinfo.ch. Retrieved 25 March 2022.
  49. ^ a b Federico Franchini (text) (31 May 2022). "Stay or go? The dilemma of Swiss companies in Russia". SWI swissinfo.ch. Retrieved 1 June 2022.
  50. ^ "Nestle Stops Most of Russian Production, Barring Essentials". SWI swissinfo.ch. 23 March 2022. Retrieved 25 March 2022.
  51. ^ "Cement maker Holcim to quit Russian market". Reuters. 29 March 2022. Retrieved 18 April 2022.
  52. ^ "Sulzer counts cost of withdrawing from Russia". SWI swissinfo.ch. 1 July 2022. Retrieved 9 July 2022.
  53. ^ "Switzerland takes over EU sanctions on Russian gold". SWI swissinfo.ch. 3 August 2022. Retrieved 4 August 2022.
  54. ^ "Wer steckt dahinter? Heisse Spekulationen um Goldimporte aus Russland in die Schweiz"(in German). NZZ.com. Retrieved 24 June 2022.
  55. ^ Walker, Owen (8 March 2022). "UBS reveals $10 million of loans to sanction-hit clients". swissinfo. Retrieved 19 March 2022.
  56. ^ "Credit Suisse Flags $914 Million Russia Net Credit Exposure". SWI swissinfo.ch. 10 March 2022. Retrieved 27 March 2022.
  57. ^ a b "Swiss banks count cost of Russia sanctions". swissinfo. 17 March 2022. Retrieved 19 March 2022.
  58. ^ "Credit Suisse CEO Signals Bank to Review Russia Wealth Business". swissinfo. 15 March 2022. Retrieved 19 March 2022.
  59. ^ Jones, Sam; Times, Finanical (20 June 2022). "Long shadow of Russian money raises tricky questions for Swiss bankers". SWI swissinfo.ch. Retrieved 28 June 2022.
  60. ^ "Geneva ordered to compensate businessman for time served". swissinfo. 24 July 2000. Retrieved 19 March 2022.
  61. ^ "World: Europe Alleged Russian mafia chief acquitted". BBC. 11 December 1998. Retrieved 19 March 2022.
  62. ^ "Swiss extradite Russian businessman Vladislav Klyushin to the US". swissinfo. 19 December 2021. Retrieved 8 March 2022.
  63. ^ "Russia sanctions list: What the West imposed over the Ukraine invasion". swissinfo. 7 March 2022. Retrieved 8 March 2022.
  64. ^ Shargorodsky, Marat (4 March 2022). "Retour sur l'histoire des oligarques et leur amour pour la Suisse". Bilan. Retrieved 19 March 2022.
  65. ^ "Swiss media on the lookout for Putin's alleged mistress – and Russian oligarchs". SWI swissinfo.ch. 20 March 2022. Retrieved 21 March 2022.
  66. ^ a b "Meet the oligarchs: Switzerland's awkward guests". SWI swissinfo.ch. 25 March 2022. Retrieved 26 March 2022.
  67. ^ Salama, Vivian; Parkinson, Joe; Hinshaw, Drew (24 April 2022). "U.S. Withholds Sanctions on a Very Close Putin Associate: His Alleged Girlfriend". The Wall Street Journal. Archived from the original on 24 April 2022. Retrieved 26 April 2022.
  68. ^ MacFarquahar, Neil (14 March 2015). "Putin Has Vanished, but Rumors Are Popping Up Everywhere". The New York Times, USA. Archived from the original on 16 September 2017. Retrieved 7 April 2017.
  69. ^ Aschwanden, E.; Jankovsky, P. (13 March 2015). "Alina Kabajewa in Tessiner Privatklinik: Spekulationen um Putin-Nachwuchs" [Alina Kabaeva in Ticino private clinic: Speculations about Putin's offspring]. Neue Zürcher Zeitung (in Swiss High German). ISSN 0376-6829. Archived from the original on 22 September 2016. Retrieved 28 September 2016.
  70. ^ Hansler, Jennifer (2 August 2022). "US sanctions Putin's reputed girlfriend - CNN Politics". CNN. Retrieved 22 August 2022.
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