Put on your seatbelts, here we goJune 23, 2015 9:00
Oil firms ignore Swiss loophole on Iran
Says "no sign" Iran's oil traded via Switzerland; Traders used Swiss base during S.African apartheid; Swiss thinking based on political, not economic concerns
June 28, 2012 1:05 by Reuters
UG, Switzerland June 27 (Reuters) – Swiss-based oil firms are not exploiting the lack of a government decision to follow the European Union and impose a ban on Iranian oil and the authorities will closely monitor the situation, the director of a Swiss federal department said.
The Swiss Economics Ministry (SECO) in April postponed a decision on whether to copy the EU’s ban on the importation, purchase or shipping of Iranian oil and has still not taken a position less than a week before the embargo takes full effect.
“At the moment we don’t see any sign that this trade is passing through Switzerland,” SECO director Marie-Gabrielle Ineichen-Fleisch told Reuters late on Tuesday.
“We know what is happening, we think we have a good view and if we see that we become a platform for circumvention then we will tell the government who will decide on action to be taken,” she added.
She declined to comment on the timing of a final decision on the sanctions.
Switzerland does not import Iranian oil but is one of the biggest global trading hubs with Geneva alone handling about a third of physical volumes.
It also houses the service company for the National Iranian Oil Company (NICO) which is responsible for oil trading and energy investment activities.
The EU measures, aimed at increasing pressure on Iran over its disputed nuclear programme, is already in effect for new contracts and will apply to pre-existing ones from July 1.
Swiss neutrality meant the country became a base for circumventing sanctions on South Africa during apartheid, according to a biography of oil trader Marc Rich.
SECO refused a Reuters transparency request for its advice to the Cabinet on implementing the oil embargo on the grounds that it might compromise Switzerland’s national interests.
Ineichen denied that the country’s indecision had been motivated by a desire to protect oil firms based on Swiss soil.
“The issue of sanctions is largely political. We do not look at a specific economic sector when we make these decisions. We also have to be careful that our neutrality is not put into question,” she added.
As a neutral intermediary, non-EU Switzerland has represented U.S. interests in Iran following the Islamic revolution in 1979.
While Switzerland has tended to follow the EU’s sanctions policies in recent years, in a session of the Cabinet in April Switzerland decided not to add the Iranian Central Bank to its list of sanctioned entities.
“The sanctions would have hit the whole economy of Iran. We want sanctions to be targeted,” said Ineichen.
SECO confirmed that the country is a centre for the delivery of soft commodities like grain to Iran and that all financial transactions have to be reported to the Swiss ministry.
(Editing by James Jukwey)