FINMA Updates Russia Sanctions List: What Swiss Financial Intermediaries Must Do Now
Switzerland's Federal Department of Economic Affairs, Education and Research (WBF/SECO) has revised Annex 8 of the Ukraine Ordinance (SR 946.231.176.72), effective 1 April 2026 at 23:00. FINMA has relayed the update to all financial intermediaries, making clear that three obligations run in parallel: implement the prohibitions, freeze affected assets without delay, and report relevant business relationships to SECO. For firms holding or transacting digital assets on behalf of sanctioned counterparties, the practical implications are immediate.
What Changed in the Ukraine Ordinance
Annex 8 revision and the SESAM database
The WBF signed off on changes to Annex 8 of the Ordinance on Measures in Connection with the Situation in Ukraine on 31 March 2026. The operative date was set for 1 April 2026 at 23:00 Swiss time. Alongside the legal text, SECO updated SESAM (SECO Sanctions Management), the authoritative Swiss sanctions database that financial intermediaries are expected to screen against. FINMA confirmed the SESAM update would be published on an urgent basis to give firms the shortest possible gap between the legal change and the screening tool refresh.
Scope of the prohibitions
The Ukraine Ordinance already covers a wide range of restrictive measures tied to the situation in Ukraine. The Annex 8 revision adjusts the list of designated persons and entities subject to those measures. FINMA's notice does not itemise each new designation, directing intermediaries instead to SESAM as the definitive source. Any firm relying on a locally cached or delayed feed of sanctions data risks operating with a gap between the legal position and its screening results.
Obligations for Financial Intermediaries
Asset freezing
Once a match against the updated list is confirmed, intermediaries must freeze the relevant assets immediately. This applies to all asset classes held, managed, or transferred on behalf of a designated person or entity, including digital assets. The freeze must be comprehensive: partial blocks or delayed action pending internal escalation do not satisfy the ordinance's requirements.
Reporting to SECO
After freezing, intermediaries must report the affected business relationship to SECO. The FINMA notice is explicit that this SECO notification does not discharge a firm's separate obligations under Swiss anti-money laundering law. Reporting to SECO and reporting to the Money Laundering Reporting Office (MROS) are distinct steps, triggered by distinct legal conditions.
Continued AML/CFT duties under the Anti-Money Laundering Act
Where a sanctions match gives rise to suspicion of money laundering or terrorist financing, Article 6 of the Anti-Money Laundering Act (GwG) requires the intermediary to conduct additional clarifications. If those clarifications do not resolve the suspicion, Article 9 GwG obliges the firm to file a suspicious activity report with MROS without delay. The sequencing matters: the SECO sanctions report comes first, but it does not replace the MROS filing if the threshold for suspicion is met.
Why Digital Asset Firms Face Heightened Exposure
Speed of on-chain settlement
Traditional asset freezes operate within clearing windows that allow some margin for intervention. On-chain transfers can settle in seconds. For virtual asset service providers and crypto-native custodians operating under Swiss law, that speed compresses the time available between detecting a potential match and preventing an outgoing transfer. Pre-transaction screening against a live SESAM feed is effectively mandatory in practice, even if the ordinance frames the duty in terms of freezing rather than blocking.
Record-keeping and audit trails
Both the freeze decision and the SECO report must be documented. For firms using digital asset accounting software or crypto bookkeeping software, the sanctions workflow needs to be integrated with the broader ledger so that frozen balances are correctly reflected, cannot be inadvertently released by routine reconciliation processes, and can be produced on demand for a FINMA examination. A manual workaround that sits outside the accounting system creates reconciliation risk and evidentiary gaps.
Our article on FINMA sanctions obligations for Swiss financial intermediaries covers the structural framework that underpins these requirements, while the piece on OFAC SDN cryptocurrency addresses and compliance priorities offers a useful parallel from the US perspective on address-level screening practice.
Practical Steps for Compliance Teams
Immediate actions
First, confirm that your sanctions screening tool has ingested the updated SESAM data. If your provider feeds from SESAM on a scheduled batch basis, verify when the next refresh occurred after 1 April 2026 at 23:00 and whether any transactions or account actions fell in the gap. Second, run a retrospective check on any activity between the ordinance's effective time and your confirmed data update. Third, document that check and its outcome.
Escalation and reporting workflow
Where a match is found, the freeze decision should be logged with a timestamp, the basis for the match, and the identity of the approving officer. The SECO report should follow promptly. If the facts meet the GwG Article 6 threshold for further clarification, that process should be opened in parallel and its outcome recorded. If suspicion cannot be cleared, the MROS report under Article 9 GwG must go out without delay. The two reporting tracks should never be conflated in the file.
Frequently Asked Questions
Does filing a SECO sanctions report mean I do not need to file with MROS?
No. FINMA is explicit that the SECO notification does not substitute for a suspicious activity report to MROS. If, after conducting the clarifications required by Article 6 GwG, the firm cannot dispel its suspicion of money laundering or terrorist financing, it must still file with MROS under Article 9 GwG.
Which database should Swiss intermediaries screen against for Russia sanctions?
SESAM (SECO Sanctions Management) is the authoritative Swiss sanctions database. FINMA directed intermediaries to SESAM for the updated list following the 31 March 2026 revision to Annex 8 of the Ukraine Ordinance.
When did the Annex 8 changes take effect?
The revised Annex 8 entered into force on 1 April 2026 at 23:00 Swiss time, following signature by the WBF on 31 March 2026.
Does the freeze obligation apply to digital assets held on behalf of designated persons?
Yes. The Ukraine Ordinance covers assets broadly. Digital assets held, managed, or transferred on behalf of a designated person or entity must be frozen on the same basis as any other asset class. Swiss virtual asset service providers are subject to the same obligations as traditional financial intermediaries.
How does this interact with ongoing AML obligations under Swiss law?
A sanctions match that gives rise to suspicion triggers Article 6 GwG, requiring additional clarification. If suspicion remains after those clarifications, Article 9 GwG requires an immediate report to MROS. These are obligations under the Anti-Money Laundering Act that run alongside, not instead of, the sanctions regime.
Source: FINMA