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EXPLAINED: Why Switzerland is a magnet for Russian money

Helena Bachmann
Helena Bachmann - [email protected]
EXPLAINED: Why Switzerland is a magnet for Russian money
This is just a tiny drop in a bucket of overall Russian assets in Swiss banks. Photo: Pixabay

For Russia’s elite, Swiss banks have long been a safe haven for their wealth. Here’s why.


Like wealthy citizens of many other countries, Russian oligarchs have been parking parts of their assets in Swiss banks and other financial institutions for many years.

Even despite low interest rates and moves towards more transparency in the financial sector, Switzerland remains an appealing destination for the ultra-rich, mostly due to the country’s longstanding political and economic stability.

In fact, according to a study by Deloitte released in October 2021, Switzerland is the world's largest wealth manager, managing 2.4 trillion in international assets; Russian money is part of the overall wealth.

Why is the Russian elite attracted to Switzerland?

As reported by Neue Zürcher Zeitung (NZZ) on March 2nd, “Switzerland has seen a strong uptick in wealthy clients from Russia in recent years”.

“Net transfers from Russia to Switzerland made by private tax residents hit a five-year high in 2020”, according to the Swiss Embassy in Moscow in 2021, as reported by NZZ.

“Key reasons for these flows included Switzerland's legal certainty, stability and neutrality”.

Russia’s financial sector, on the other hand, “has a contentious history that has led to much distrust for banks among the local population”, according to the website for Russia’s foreign nationals.


READ MORE: OPINION: Why Switzerland is failing in its fight against money laundering

While the exact sum of what is commonly referred to as “Russian money” in Switzerland is not known at this point, according to the Bank for International Settlements, it amounted to $23 billion in the third quarter of 2021

Who are the major Russian clients of Swiss banks?

A significant portion of the money hoarded in Swiss banks belongs to oligarchs believed to have close connection to Russia’s president Vladimir Putin.

Switzerland has followed EU’s lead in freezing assets of hundreds of these oligarchs as part of sanctions against Russia  for invading Ukraine.

READ MORE: Neutral Switzerland’s economy shaken by sanctions on Russia

For its part, the Swiss Bankers Association reacted to the sanctions by saying that Russia was “not a priority” market, and excluded the Swiss subsidiaries of Russia’s Gazprombank and Sberbank from its ranks. 

However, this is not the first time that Swiss banks freeze Russian money.

In 2013, Swiss prosecutors froze bank accounts  as part of a widened probe into a Russian money laundering case linked to lawyer Sergei Magnitsky, whose death in a Russian prison sparked a row between Moscow and Washington.

And in August 2018, Credit Suisse blocked roughly 5 billion francs linked to Russia to comply with US sanctions against Moscow.

READ MORE: Gold, secrecy and wealth: Six Swiss bank myths that need to be busted


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