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Traders can decide if Russian commodities deals are allowed -Swiss -Breaking


© Reuters. FILEPHOTO: This is a general view showing oil treatment facilities at Vankorskoye’s oilfield owned by Rosneft, Russia. March 25, 2015

By Michael Shields

ZURICH, (Reuters) – Trading houses will be able to decide whether Russian state-controlled companies are required to make commodity transactions in order for them not fall under international sanctions. This was according the Swiss enforcement agency.

Last month, the State Secretariat for Economic Affairs had stated that it would determine case by case whether these purchases were compliant with European Union sanctions. Bern also adopted European Union sanctions to punish Ukraine’s invasion.

SECO spokesperson said that it is still permissible to make deals to purchase, import, or transport raw materials between Russia and Switzerland. These transactions can also be made to any member of the European Economic Area (or the Western Balkans) as long as they are not prohibited by the sanctions ordinance.

According to the agency, “As in EU, there is no need for prior authorization or approval from SECO in Switzerland,” it told Reuters via email.

When asked if this meant that such deals were not subject to Swiss scrutiny, the agency replied: “SECO doesn’t need to grant exemption. However, the economic agents must first determine if the exemption applies. SECO can be contacted if they have any questions. This corresponds with the EU regulation.

While oil purchases are allowed within Europe, the major international trading houses have reduced their purchases of Russian crude and gasoline from Russian state-controlled firms like Rosneft or Gazpromneft in order to not be subject to EU sanctions. This is due to comply with the “strictly required” clause which applies starting mid-May.

Although the European Commission proposed this month an oil embargo against Russia, EU foreign ministers were unable to pressurize Hungary on Monday.

Switzerland has stated that it will adopt EU sanctions to Russia and is an important hub for the trading of Russian commodities.

Russia considers its invasion of Ukraine to be a military special operation in order to disarm its neighbor.