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Switzerland breaks 207-year-old rule to fight Russia

·Personal Finance Editor
·2-min read
Russian President Vladamir Putin on a background of the Swiss Alps in Switzerland.
Switzerland has joined the EU in imposing sanctions on Russia. (Source: Getty)

Around $15.6 billion in Russian assets will be frozen after Switzerland broke its stance on neutrality to impose sanctions on Russia amid the ongoing war in Ukraine.

This the first time Switzerland has broken its policy of political isolation since the 1815 Congress of Vienna formally recognised the nation's neutrality.

Switzerland holds around $15.6 billion in Russian assets, according to Swiss National Bank data in 2020.

The country, which is known as being a safe haven for storing and, at times hiding, money declared it would be joining the rest of Europe in imposing sanctions.

"We are in an extraordinary situation where extraordinary measures could be decided," President and Foreign Minister Ignazio Cassis told a news conference in Bern on Monday.

Switzerland’s fascinating history of financial secrecy

Switzerland is known as the “grandfather of the world’s tax havens” and is one of the world's largest offshore financial centres, according to the Financial Secrecy Index.

The reason for this is the nation's famed secrecy laws.

In 1713, before Switzerland even existed as a federal state, the Great Council of Geneva adopted regulations prohibiting bankers from revealing details about their clients.

It was these laws that made Geneva banks the go-to destination for Catholic French kings - which were among the earliest-known clients.

Before the official banking secrecy law of 1934 was adopted, client confidentiality rules applied in Switzerland - much like the confidentiality between a doctor and patient.

This meant that a banker revealing any information about their client would have been a civil offence. Nowadays, it is a criminal one.

How much money does Putin keep offshore?

It is hard to say how much money the Russian President actually has, but the 2016 leak of the Panama Papers revealed a string of offshore accounts and loans worth around $2 billion allegedly linked to the Russian leader.

According to a Washington Post report on official figures from the Russian Government, Putin makes around $155,000 a year as president.

However, many experts predict his wealth is far greater than that with Hermitage Capital Management CEO Bill Browder telling CNBC he believed Putin’s net worth to be around $200 billion.

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