A Swiss-based trading house ships bulk commodities through a European port. The vessel calls at an intermediate terminal. Its charterer surfaces on SECO's sanctions list during a mid-voyage compliance check. What obligations does the trading house carry under Swiss law? Can it complete the voyage? What must it report, and to whom, and how quickly? These questions are not academic.
Switzerland's SECO sanctions regime (administered by the State Secretariat for Economic Affairs under the Swiss Embargo Act and the associated ordinances) applies a set of prohibitions and asset-freeze rules that reach maritime and shipping transactions directly. As of January 2026, Switzerland has adopted measures substantially aligned with EU sanctions, including restrictions that cover vessel finance, cargo insurance, port access, and freight services connected to designated persons or territories. The sanctions are enforced domestically, but because Swiss financial institutions sit at the centre of many commodity-trade finance chains, SECO's reach is considerable beyond Swiss borders.
This guide walks through the maritime and shipping sanctions analysis under SECO step by step: from identifying the applicable prohibitions, through the ownership and control test, to reporting obligations, licensing routes, and the points at which experienced sanctions lawyer involvement materially reduces risk.
Step 1: Identify which SECO ordinance governs the transaction
The first step is to identify which Swiss ordinance is in force for the parties and goods involved, because SECO administers multiple country-specific and thematic ordinances under the Swiss Embargo Act, and the prohibitions differ between them.
Switzerland's maritime measures do not sit in a single statute. Instead, each SECO ordinance addresses the relevant country regime and lists the prohibited activities. Shipping-related prohibitions commonly cover: the provision of vessels or vessel chartering services to or for the benefit of designated persons; the financing or insuring of maritime cargo connected to listed parties or restricted territories; the rendering of port services; and the provision of technical assistance related to vessel operation. Not every ordinance contains identical language, and a transaction may fall under more than one if it involves goods subject to separate sectoral restrictions.
Practical question: have you identified every ordinance potentially engaged by the transaction, or only the most obvious one? In our cross-border practice, overlooked thematic ordinances are a recurring source of exposure for commodity traders who focus on the counterparty list but miss the goods-based restrictions.
The Swiss Embargo Act grants SECO authority to issue the ordinances and to enforce them. Compliance counsel advising on a maritime matter should begin with a full ordinance map before moving to counterparty screening.
Step 2: Screen all parties and vessels against the SECO consolidated list
Once the governing ordinances are identified, every party in the transaction chain – charterer, sub-charterer, cargo owner, cargo receiver, vessel operator, flag-state entity, and port agent – must be screened against SECO's published sanctions list and the UN Security Council Consolidated List, which Switzerland implements directly.
The screening universe in a maritime transaction is wider than in a simple trade sale. It includes:
- the named charterer and any disclosed sub-charterer;
- the vessel's registered owner and the beneficial owner (the natural or legal person that ultimately controls or profits from the vessel's operation);
- the vessel manager and the commercial operator if these are separate entities;
- the cargo consignor and consignee;
- insurers and re-insurers providing hull, P&I, or cargo cover;
- the port or terminal through which the goods will pass; and
- any financial institution involved in trade-finance or payment processing connected to the cargo.
SECO's list must be checked, but it is not sufficient alone. Switzerland adopts UN Security Council designations automatically. Where the relevant ordinance mirrors EU measures – as several major Swiss ordinances do – the EU Consolidated List should be cross-checked as well, because a party may be EU-listed without yet appearing on SECO's own list, and Swiss financial institutions caught in a multi-jurisdiction chain face exposure under both sets of rules.
Vessel-level screening adds a further layer. A ship's IMO number (the unique vessel identifier issued under the International Maritime Organization regime) should be checked, because some designations attach to the vessel directly rather than merely to its owner. Flag-of-convenience registries with limited transparency increase the difficulty of beneficial-ownership verification.
Step 3: Apply the SECO ownership and control test
Where a counterparty is not itself listed, the analysis does not stop. SECO applies an ownership and control test – comparable to the EU approach – that captures entities owned or controlled by listed persons even where those entities do not appear on the list by name.
Under the Swiss approach, which tracks the EU methodology, an entity is treated as caught by the measure if a designated person owns 50 percent or more of its shares or voting rights, or if a designated person otherwise controls it through other means – board appointment rights, veto powers, contractual dominance, or economic dependency. The control limb is fact-specific and broader than a mechanical shareholding calculation.
How does this compare across regimes? OFAC's rule under US sanctions is mechanical at the 50 percent ownership threshold and does not formally include a separate control test; the EU and SECO add the control dimension, which means a company a designated person directs but does not majority-own may still be caught in Switzerland and the EU, while a US-only analysis would not reach it. For a shipping business with US-dollar payment flows – as almost every commodity trade has – both analyses run simultaneously. Divergence between the US and Swiss positions on whether a vessel operator is "controlled" can create a compliance gap that a multi-regime review must close.
We regularly advise clients to build ownership mapping into their due-diligence process at the term-sheet stage rather than at the point of payment, because ownership restructurings that occur after a transaction is contractually committed are far harder to manage cleanly.
The position above covers the standard case. Your facts – the counterparty's shareholder structure, the vessel's registry, the cargo's classification, and the ordinances in play – change the analysis. For a tailored assessment of a specific shipping transaction under SECO, contact Calder & Vance at info@caldervance.com.
Step 4: Assess cargo and sectoral restrictions
Even where no party to the transaction is designated, SECO ordinances may prohibit the transaction on the basis of what is being shipped. Sectoral restrictions under certain ordinances target specific categories of goods – dual-use items, energy-sector goods, luxury goods, or goods usable in specific industrial sectors – regardless of the counterparty's listed status.
The goods-based analysis requires three sub-steps.
- Classify the cargo against the lists of restricted goods in the applicable ordinance. Switzerland's dual-use controls also overlap here: goods that fall under the Swiss dual-use regulation may require an export authorisation from SECO independently of the sanctions measure.
- Identify the end-use destination. Where a restricted ordinance is in force for a territory, routing cargo through a third-country port does not automatically cure the restriction if the ultimate destination remains the sanctioned territory or the cargo is ultimately for the benefit of a restricted party.
- Check sectoral services prohibitions. Several ordinances specifically prohibit Swiss persons from providing maritime transport services – vessel chartering, cargo brokering, freight forwarding, maritime insurance – for restricted goods even if the Swiss person does not own the cargo. A Swiss-based broker arranging freight for a non-Swiss shipper may be caught.
Is the Swiss freight broker who arranges a voyage for a foreign shipper exposed if the cargo later turns out to fall under a Swiss sectoral prohibition? The short answer is yes, if the prohibited character of the goods was known or should have been known at the time of arrangement. The knowledge element matters: SECO's enforcement posture takes intent and due-diligence quality into account, but it does not require the enforcer to prove actual knowledge in every case.
Step 5: Manage vessel calls, port-service obligations, and mid-voyage flags
Maritime sanctions create practical complications that do not arise in ordinary trade finance: a vessel cannot simply stop mid-ocean, and a port cannot easily refuse a vessel that has already entered its approach channel. SECO's regime does not suspend normal maritime safety obligations, but it does require Swiss-nexus parties – including port operators, agents, and finance providers with Swiss connections – to take active steps when a sanctions issue arises during a voyage.
The principal actions available to a Swiss-nexus party facing a mid-voyage compliance issue are:
- Freeze and hold. Where cargo or vessel-related funds are held by or transiting through a Swiss financial institution and a designated person has an interest, those assets must be frozen immediately. SECO must be notified promptly; the notification window under current practice is short and the obligation applies as soon as the institution identifies the exposure.
- Seek a licence or authorisation. SECO can issue individual authorisations permitting a transaction that would otherwise be prohibited, where specific conditions are met. Humanitarian carve-outs, prior-contract protections, and specific-purpose licences each exist, but they must be applied for before the prohibited act is taken – retrospective authorisation is not guaranteed.
- Terminate or novate the contract. Where no licence pathway is available, a party may need to withdraw from the contract. Swiss contract law governs the consequences, and the interaction between force majeure clauses, sanctions clauses, and SECO's prohibitions should be reviewed by counsel before any communication to counterparties.
In a recent matter, a commodity trader with Swiss payment obligations discovered mid-transit that a vessel sub-charterer had been added to the SECO list during the voyage. We assessed the asset-freeze obligation, identified the relevant authorisation pathway for port-of-necessity calls, and advised on the reporting sequence to SECO. The matter was resolved through a combination of a short-term licence and a formal notification, without the trader incurring enforcement exposure.
If a transaction has already been flagged, or a filing has been refused, an early review can preserve options that narrow with time. Contact Calder & Vance at info@caldervance.com for a confidential assessment.
Step 6: Apply cross-regime analysis – OFAC, EU, and UK
A transaction with Swiss-law elements rarely involves only SECO. Most commodity shipping chains pass through US-dollar clearing, involve EU-domiciled counterparties or EU-flagged vessels, or engage UK-based P&I clubs and maritime insurers. Each of those connections imports a separate regime.
The key cross-regime intersections are as follows.
OFAC and the US nexus. Any US-dollar payment – even one that passes through a US correspondent bank for a fraction of a second – gives OFAC jurisdiction over the underlying transaction. OFAC's secondary-sanctions risk (the risk that non-US parties conducting certain transactions with designated persons may themselves be targeted for designation or cut off from US financial markets) adds further pressure on Swiss-domiciled commodity traders even where no US person is directly involved. OFAC's ownership test at 50 percent applies alongside SECO's control-inclusive test.
EU measures. Where cargo moves through an EU port, or where an EU financial institution provides trade finance, EU Council regulations impose parallel prohibitions. Switzerland's ordinances are often modelled on EU measures, but they are not identical: the timing of adoption differs, specific goods annexes may diverge, and the licensing authority is SECO rather than an EU member state competent authority. A gap between when the EU adopts a new measure and when Switzerland adopts the equivalent can create a short window of material divergence.
UK measures. UK P&I clubs, London marine insurers, and UK-based commodity brokers all fall under OFSI's financial-sanctions regime and the UK's trade sanctions regime administered by HMRC. The UK ownership and control test under SAMLA-based regulations also includes a control limb, closely analogous to the EU and Swiss approaches, but enforced by OFSI with its own licensing process and its own penalty framework. A Swiss-UK cross-border shipping transaction requires both SECO and OFSI analysis to run concurrently.
For businesses that use correspondent banking relationships or trade-finance facilities routed through US or UK institutions, our correspondent banking and de-risking service addresses the OFAC risk layer alongside the SECO analysis.
The practical consequence of multi-regime exposure is that a SECO-compliant transaction may still be non-compliant under OFAC or UK rules, and vice versa. Where two regimes conflict – one prohibiting and one permitting the same transaction – the stricter prohibition governs for the party subject to both. Swiss-nexus businesses need to map every regime in play before concluding that a transaction is cleared.
Step 7: Record-keeping, internal escalation, and voluntary self-disclosure
Once a transaction has been cleared through the steps above, the compliance record must be created and retained. Under SECO's regime and the Swiss Embargo Act, parties are required to maintain documentation sufficient to demonstrate that they applied due diligence at the time of the transaction.
What does adequate record-keeping look like? At minimum, the file should contain: the screening results for each party at the date of screening (not reconstructed later), the ownership analysis for any counterparty where a designated-person connection was considered, the classification records for any goods checked against sectoral restrictions, and the rationale for any decision not to seek a licence or authorisation. Records should be maintained for the period required by the applicable ordinance; where no specific period is stated, aligning with the five-year standard applied in comparable financial-crime contexts is prudent practice.
Escalation procedures matter as much as the records themselves. A compliance officer who identifies a potential hit mid-transaction needs a clear internal path to a decision-maker and, where the potential breach is serious, to external counsel. SECO's enforcement posture – like that of comparable regulators – treats the quality of a party's due-diligence and escalation process as a relevant factor in assessing culpability and in determining whether a voluntary self-disclosure (a proactive report to SECO of an apparent violation, before the regulator discovers it independently) mitigates the sanction.
Voluntary self-disclosure under Swiss law is not a guaranteed mitigation, and its effect depends on the timing, completeness, and candour of the disclosure. We regularly advise on the decision whether to disclose, the scope and timing of the disclosure, and the preparation of the supporting file. Early engagement with counsel before making a disclosure is strongly advisable.
Common mistakes and risk flags in SECO maritime compliance
One persistent myth in maritime compliance is that Swiss sanctions cannot reach a transaction if the goods never physically touch Switzerland. This is incorrect. SECO's reach turns on the nexus – the presence of a Swiss financial institution, a Swiss-domiciled counterparty, Swiss-law contractual obligations, or a Swiss-registered vessel – not on the physical location of the cargo. A Swiss bank processing a letter of credit for a purely non-Swiss shipment is a Swiss nexus. So is a Swiss commodity trading entity that acts as principal even if it never warehouses the goods.
The most common operational mistakes we observe are:
- Screening only the direct counterparty, not the full chain of sub-charterers, vessel owners, and cargo receivers.
- Failing to re-screen at key transaction milestones – signing, shipment, and payment – because the sanctions list changes between them.
- Treating a SECO ordinance clearance as a global clearance without running the OFAC and EU layers.
- Omitting the vessel itself from screening, relying only on party-name checks.
- Applying the US 50-percent ownership test but missing the additional Swiss and EU control element for borderline ownership structures.
- Assuming a completed voyage without incident is proof of compliance, when the absence of enforcement is not the same as the absence of a violation.
Risk flags that should trigger immediate escalation include: a counterparty with an ultimate beneficial owner in a restricted territory; cargo routing through a port with documented sanctions-evasion patterns; a vessel that has recently undergone a rapid flag or name change; and any instruction from a counterparty to alter payment routing in a way that obscures the chain of parties.
Related practices
- Correspondent banking and de-risking (OFAC) – managing US-dollar payment exposure and de-risking pressure for cross-border businesses
- Maritime and shipping sanctions: Singapore guide – step-by-step analysis of the Singapore maritime sanctions regime
- Maritime and shipping sanctions: UAE guide – practical guide to UAE maritime sanctions obligations and compliance steps