How to aggregate holdings in ownership analysis under SECO

A Swiss-based trading house receives a new counterparty referral. Name screening returns no direct hit. The compliance officer closes the file. Three weeks later, an audit surfaces two separate designated persons who, between them, hold a combined stake that should have stopped the transaction. The breach is already live. This is not an unusual sequence. It is, in our experience, one of the most common failure modes in SECO-related ownership analysis – and it is entirely preventable.

Aggregating holdings across several listed persons under SECO requires mapping every designated person's stake in a target entity and summing those stakes to determine whether the combined holding triggers an asset-freeze obligation. Switzerland aligns its autonomous sanctions regime closely with EU measures, and the ownership analysis it applies follows the same logic: where listed persons together hold a controlling interest, the entity is treated as caught by the relevant ordinance, even when no single person crosses the threshold alone.

This guide walks through the analysis as a decision tree: first, whether SECO's rules apply at all; then how to map individual holdings; then how to aggregate them correctly; then where the analysis diverges from OFAC, OFSI, and EU practice; and finally when the result requires you to stop and seek specialist sanctions counsel.

Does the SECO sanctions regime apply to this entity and transaction?

SECO administers Switzerland's sanctions regime through ordinances that give direct legal effect to asset-freeze obligations; before aggregating anything, a compliance team must confirm that the ordinance in question reaches both the entity being analysed and the transaction in front of them.

Switzerland operates two distinct layers. First, it implements UN Security Council measures through national ordinances. Second, it maintains autonomous sanctions that frequently – though not always and not automatically – track EU Council Regulations. As of January 2026, Switzerland aligns with EU measures across several thematic programmes, but the alignment is not mechanical: a new EU listing does not take effect in Switzerland until SECO issues or amends the relevant ordinance. The lag between an EU designation and its Swiss counterpart is a real risk. Checking the current SECO consolidated list directly, rather than assuming EU equivalence, is the first gate in any Swiss ownership analysis.

The second gate is jurisdictional scope. Swiss ordinances generally apply to Swiss persons and entities, to conduct on Swiss territory, and to Swiss financial institutions regardless of where a transaction is booked. If your business has a Swiss subsidiary, a Swiss bank account, or a counterparty relationship that passes through a Swiss correspondent bank, the SECO regime is almost certainly in scope. If your only connection is a transit shipment passing through a Swiss intermediary, the analysis is less automatic – but not zero. Confirm the connection before proceeding.

If SECO applies: how do you map individual designated-person holdings?

Mapping individual holdings is the factual foundation of the aggregation exercise; without a complete ownership picture, the aggregation step produces a meaningless result.

Start with the direct shareholders of the target entity. Pull the commercial register extract for the relevant jurisdiction and cross-reference each named shareholder against the SECO consolidated list. This step is often treated as the whole exercise. It is not even the beginning. Direct-level screening addresses only the most transparent ownership structures. Designated persons who have an interest in the target through one or more intermediate holding companies will not appear at the first layer.

The next step is to trace indirect holdings. Work back through each intermediate entity to its ultimate beneficial owners. In our experience, a two-layer trace is the practical minimum; for complex structures, particularly those involving multiple jurisdictions or trust arrangements, a three- or four-layer trace is often necessary. SECO's ordinances do not prescribe a mechanical depth rule – they impose an obligation to avoid making assets available to designated persons or entities they control. That obligation is outcome-oriented, which means the depth of your trace must be sufficient to meet it, not merely sufficient to clear a superficial screen.

Record every individual stake as a percentage of the target entity at each layer. The figure you need for aggregation is the effective economic interest each designated person holds in the target, after adjusting for intermediate-layer dilution. A designated person holding sixty percent of an intermediate company that holds fifty percent of the target effectively holds thirty percent of the target for aggregation purposes. Do the arithmetic at each layer before you move to the next step.

If you have individual holdings mapped: how do you aggregate them correctly?

Aggregation under the Swiss framework treats separately-held stakes by multiple designated persons as cumulative: the holdings are added together, and if the combined total reaches a level that indicates control or a dominant interest in the entity, the asset-freeze prohibition applies to the entity itself.

The EU formulation – which Switzerland's approach mirrors – uses a threshold of more than 50 percent for ownership, and supplements that with a control test that can catch entities where no single metric reaches the threshold but the combination of ownership, voting rights, and the ability to appoint management produces effective control. Switzerland's alignment with the EU means that practitioners should apply the same two-limbed approach: ownership aggregation first, control assessment second.

Aggregation arithmetic is straightforward in principle. If designated person A holds twenty-two percent and designated person B holds thirty-one percent, the combined holding is fifty-three percent. The entity is treated as caught, even though neither A nor B would have triggered the threshold individually. The compliance risk that follows is not marginal: an asset-freeze obligation applies, and any transaction that provides funds or economic resources to or for the benefit of the entity is prohibited.

Where the combined stake is below fifty percent, the analysis does not end. The control limb of the test asks whether designated persons, acting individually or collectively, can determine the strategic or operational direction of the entity – through voting agreements, board appointment rights, veto provisions, or contractual arrangements that replicate the economic effect of control. Have you examined the shareholder agreement and the articles of association as well as the share register? These documents frequently contain mechanisms that are not visible in a commercial register extract.

What if the result is inconclusive – partial stakes, layered structures, or contested control?

Inconclusive results are common. They arise most often where designated-person holdings are fragmented across multiple intermediate entities, where trust structures or nominee arrangements obscure beneficial ownership, or where contractual control mechanisms are ambiguous in their legal effect.

The compliance-sound response to an inconclusive result under SECO is to treat it as a risk flag rather than a clearance. Switzerland's ordinances do not provide a formal "comfort letter" mechanism comparable to an OFAC specific licence or an OFSI licence; the regime works through prohibitions and exceptions, and guidance from SECO itself on ownership and control questions has historically been less granular than the published guidance available from OFAC or OFSI. In practice, this means the burden of forming a defensible legal position falls more heavily on the operator and its counsel.

In our experience, the decisions that create the most serious exposure are not the ones where a compliance team identifies a clear hit and proceeds anyway. They are the ones where a team identifies an inconclusive result, documents it inadequately, and proceeds on the basis that "nothing came up." A well-documented inconclusive analysis – with a clear record of the methodology, the data sources, and the legal reasoning applied to the control question – is a materially stronger position than an undocumented clearance.

Where the structure involves trust arrangements, special-purpose vehicles, or nominee shareholdings, consider whether the information available to you is sufficient to reach a conclusion at all. If it is not, the defensible answer is to obtain further information from the counterparty before proceeding, or to consult counsel before the transaction closes.

How does the SECO analysis differ from OFAC, OFSI, and the EU?

The cross-regime comparison matters because a business operating across multiple jurisdictions cannot treat a SECO clearance as a clearance under other regimes, or vice versa. Each regime applies its own rules, and the stricter prohibition governs a person subject to more than one of them.

Under OFAC, the 50 percent rule (OFAC's rule treating entities owned 50 percent or more by blocked persons as themselves blocked) is mechanical. If the aggregated direct and indirect ownership by blocked persons reaches or exceeds 50 percent, the entity is blocked. Control is not a separate legal test in the OFAC formulation: ownership at or above the threshold is determinative. This makes the OFAC test narrower in one sense – it does not sweep in entities that are controlled but not majority-owned – and clearer in another, because the arithmetic is the answer.

Under OFSI, the UK ownership and control test (the UK and EU test for whether a non-listed entity is caught through a listed person) is broader. OFSI can treat an entity as subject to the asset-freeze obligation if it is owned or controlled by a designated person, and control can be established through a variety of mechanisms short of majority ownership. UK case law distinguishes actual, existing influence from a hypothetical ability to exert control; the leading authorities hold that control must be actual, not theoretical. As currently in force, verify the current position before relying on it.

The EU position, which most directly informs the SECO approach, uses a threshold of more than 50 percent for ownership and applies a separate control test. An EU General Court ruling has held that control must be proved by objective and sufficiently weighty evidence; the character of a counterparty's state environment is not by itself sufficient. Switzerland tracks this framework without necessarily tracking every judgment of the EU courts, so a Swiss adviser should assess the control question on the basis of Swiss ordinance language and SECO guidance, taking EU practice as a persuasive reference rather than a binding one.

Singapore implements UN Security Council measures through its own regulations, and its treatment of ownership and control is substantially less developed in public guidance than the OFAC, OFSI, or EU frameworks. Japan applies restrictions under its foreign exchange legislation. For a transaction that is simultaneously within the reach of SECO and one or more of these other regimes, each regime's analysis must be run independently. A combined holding that does not breach the SECO threshold may still breach OFAC's 50 percent rule if additional US-person ownership is present, or vice versa. The regimes do not share a single ownership determination.

What are the principal risk flags in a SECO aggregation exercise?

Several patterns reliably indicate that a SECO aggregation exercise carries elevated risk, and each warrants escalation to a sanctions lawyer before the transaction proceeds.

The first is a fragmented ownership structure with multiple minority designated-person holdings that individually fall below the relevant threshold. This pattern is the structural equivalent of the two-shareholder scenario described earlier, except that it may involve four, five, or more designated persons each holding a small stake. Name-screening of the target entity's registered shareholders will not surface this risk; only a full beneficial-ownership trace will.

The second is the presence of a nominee shareholder or a trust arrangement. Nominee arrangements are common in certain jurisdictions as a matter of commercial practice, but they are also a standard vehicle for concealing beneficial ownership. A SECO aggregation exercise cannot treat a nominee's stake as belonging to the nominee without first establishing who the beneficial owner is. Where the counterparty declines to provide beneficial ownership information, that refusal is itself a risk flag.

The third is a recent change in the ownership structure of the target entity. Share transfers, capital increases, and corporate restructurings shortly before a transaction close warrant close scrutiny. A sharp change in a target's ownership structure, or a change in its beneficial-ownership disclosure position, should be treated with the same caution as a sharp change in trade flows to a transit jurisdiction.

The fourth is jurisdictional complexity: a target entity incorporated in one jurisdiction, with shareholders in several others, and intermediate holding companies in one or more further jurisdictions. The further removed the designated person is from the surface of the ownership structure, the more reliance the compliance team is placing on the accuracy and completeness of information obtained from third parties. Where that information cannot be independently verified, the risk profile of the aggregation conclusion rises accordingly.

The fifth is a lag between a new EU designation and its incorporation into Swiss ordinances. If a person has recently been designated under EU measures, and your Swiss analysis relies on the SECO list as the only screening reference, you may clear a counterparty who will shortly be subject to a Swiss ordinance amendment. Monitoring the EU designation list in parallel with the SECO list addresses this risk at its source.

When should the aggregation analysis be escalated to counsel?

The aggregation analysis should be escalated to specialist compliance counsel whenever the result is inconclusive, whenever a control question cannot be resolved on the available documentation, or whenever the entity is subject to more than one sanctions regime and the conclusions under those regimes diverge.

Some businesses treat the escalation threshold as a matter of commercial sensitivity – escalating only when a deal is large enough to justify the cost. In our experience, this is an error. The cost of an incorrect clearance is not limited to the transaction itself: it extends to the record-keeping obligations that attach to the position taken, to the regulatory exposure that arises if the breach is later identified, and to the reputational consequences that follow a public enforcement action. The cost of early counsel involvement is almost always lower than the cost of late remediation.

There is a common view that name screening alone is enough to satisfy the compliance obligation. It is not. SECO's ordinances impose a substantive obligation: a business must not make assets available to a designated person or to an entity that designated persons own or control in the relevant sense. Meeting that obligation requires an ownership and control analysis, not just a name match. A screening tool that flags only direct hits will not surface the aggregation risk described throughout this guide. Counsel can help map the gap between what a firm's screening tool actually does and what the relevant ordinance actually requires.

We act for multinationals, financial institutions, and exporters on sanctions and export-control matters across the major regimes. If a SECO ownership analysis is producing an inconclusive result, or if you are assessing a structure where multiple designated persons each hold minority stakes, reach our team at info@caldervance.com for a structured review.

Related practices

• Affiliate-level restrictions under the EAR – how BIS affiliate-level rules interact with sanctions ownership analysis
• Aggregating holdings under Singapore's sanctions regime – the Singapore framework compared with SECO and the EU approach
• Blockchain analytics and screening under the EAR – applying analytics-based screening to export-control and sanctions obligations

This publication is general information and does not constitute legal advice. For advice on your situation, contact info@caldervance.com.