The Swiss government will not match European Union sanctions on Iran, deciding yesterday (5 July) that its own pending set of toughened measures would exclude a ban on trading Iranian oil and defending its traditional neutrality in the face of EU and U.S. pressure.
The move offers top Swiss-based oil traders such as Glencore and Trafigura a legal loophole for dealing in Iranian crude, although the prospect of falling foul of EU and EU restrictions will almost certainly deter them.
Both firms said they have halted all Iranian oil trade.
Switzerland is one of the top centres for physical oil trading and also hosts a branch of the National Iranian Oil Company, although the country does not import oil from Iran.
New Swiss sanctions, which come into force today, will affect supplies for the petrochemical industry, telecommunications equipment, as well as the purchase and sale of precious metals and diamonds, the Federal Department of Economic Affairs said.
They follow an EU ban on the importation, purchase or shipping of Iranian oil which was rolled out on 1 July in an effort to pressure the Islamic Republic over its disputed nuclear programme. Toughened US sanctions on Iran took effect on June 28.
“The public relations penalty the larger traders will pay if caught trading with Iran is colossal,” said Matthew Parish, partner at Geneva-based law firm Holman Fenwick Willan.