A Swiss-based treasury team receives a payment instruction from a counterparty whose ultimate beneficial owner has just appeared on SECO's published sanctions lists. The funds are in transit. The compliance officer has minutes, not days, to decide whether to freeze the credit, release it, or apply for authorisation. Which route is correct, and what does SECO actually require?
Payment authorisations under SECO – Switzerland's State Secretariat for Economic Affairs, the authority responsible for enforcing Swiss sanctions ordinances – allow a business to execute an otherwise prohibited financial transfer by obtaining written approval before the transaction settles. The procedure is distinct from a general exemption and must be assessed against the specific ordinance that governs the sanctioned party or territory involved. As of June 2026, Switzerland maintains autonomous sanctions ordinances that in several respects align with EU measures, but Swiss law applies its own tests, its own administrative process, and its own timeline.
This guide walks through the authorisation procedure step by step, identifies the points where applications most often fail, and explains how the Swiss process compares with parallel regimes a cross-border business will frequently encounter alongside it.
Step 1: Establish whether the payment is prohibited and by which ordinance
Before approaching SECO, a compliance team must identify the precise legal basis for the restriction – that is, which Swiss sanctions ordinance applies to the counterparty, the goods or services being paid for, or the destination of the funds. This determination is the foundation of the entire authorisation request; an application that misidentifies the ordinance will be returned or refused.
Switzerland enacts sanctions through ordinances issued under the Federal Act on the Implementation of International Sanctions (the Embargo Act). Each ordinance targets a specific regime – whether a country-based programme or a thematic programme such as terrorist financing or proliferation-related designations. The first task is to match the blocked party or the restricted transaction to the correct ordinance. Do not assume that because a measure aligns with an EU Council regulation the Swiss legal basis is the same instrument; it is not.
Screening tools should flag the name or entity, but the compliance review must go further. Check whether the listed person is the direct counterparty, an intermediary bank, the ultimate beneficial owner of the paying or receiving entity, or a person exercising control over the account. Under Swiss ordinances, the prohibition extends not only to transfers to or for the benefit of listed persons but also to transactions that would make funds available to them indirectly. In our experience, the most dangerous gap is the layered ownership structure where the listed person sits two or three levels above the contracting entity but still captures the payment under the "benefit" test.
Once the ordinance is identified and the prohibition confirmed, two questions govern whether an authorisation is even possible: does the ordinance contain a discretionary authorisation mechanism for payments of this type, and does the specific transaction fall within the categories that SECO has historically been willing to consider? Not every ordinance provides the same authorisation flexibility. Some are more permissive toward humanitarian or maintenance payments; others are narrower.
Step 2: Prepare the authorisation request – what SECO requires
SECO's authorisation process is administrative: the applicant submits a written request to SECO's Export Controls and Sanctions division, setting out the legal and factual basis for the proposed payment and the grounds on which SECO should exercise its discretion to permit it. There is no standard published form for payment authorisations of this kind; the request must be drafted to the specific facts of the transaction.
The request should contain, at a minimum, the following elements. First, a precise identification of the parties: the payer, the payee, any intermediary financial institutions, and – critically – the listed person whose designation triggers the restriction. Second, a description of the transaction: the amount, the currency, the value date, the underlying commercial or legal obligation being discharged, and the contractual instruments supporting it. Third, the legal analysis: which ordinance applies, why the payment is prohibited in the absence of authorisation, and which provision of the ordinance grants SECO the discretion to authorise it. Fourth, the grounds for authorisation: these will typically draw on one or more established categories such as humanitarian necessity, pre-existing contractual obligations, maintenance of legitimate business activities, or the payment of legal fees. Fifth, supporting documentation: contracts, invoices, ownership charts, corporate extracts, and any prior correspondence with SECO on related matters.
The quality of the ownership and control analysis within that request is the single factor that most distinguishes successful from unsuccessful applications in our cross-border practice. SECO will ask how the proceeds will reach the ultimate beneficiary and whether any portion will flow to or benefit a listed person. An applicant who cannot answer that question with documented evidence does not have a complete submission.
What is the practical timeline? SECO does not publish a binding decision period for payment authorisations, and processing times vary considerably with the complexity of the transaction and the completeness of the submission. A straightforward humanitarian payment supported by clear documentation can receive a response within a few weeks. A commercially complex payment involving layered ownership structures, multiple ordinances, or unusual contractual arrangements can take materially longer. Where time is critical – and in payment contexts it usually is – applicants should contact SECO's division proactively before submitting the formal request. Pre-submission dialogue can narrow the evidential scope, clarify which grounds SECO is likely to weigh, and reduce back-and-forth after submission.
Step 3: Manage the financial institution's obligations in parallel
The payment authorisation request goes to SECO, but the financial institution through which the payment moves has independent obligations that run concurrently. Understanding this division of responsibility is essential for any compliance officer coordinating a cross-border transaction.
Swiss banks and payment service providers are required under Swiss anti-money-laundering rules and under the relevant ordinances to freeze funds that are, or may be, subject to a sanctions prohibition. The institution cannot simply release a payment because the client has applied to SECO; it must await either a confirmed SECO authorisation or a clear legal determination that no prohibition applies. In our experience, a common source of deal delay is a client who applies for a SECO authorisation without simultaneously notifying the correspondent bank or the domestic bank through which the payment routes. That notification – and in some cases a parallel reporting obligation – is the institution's own legal requirement, separate from the authorisation process.
Where the payment routes through a US correspondent bank, the analysis bifurcates. OFAC's jurisdiction extends to US-dollar transactions that clear through the US financial system, regardless of the nationality of the sender or receiver. A SECO authorisation does not resolve the OFAC exposure. A business authorised by SECO to make a payment to a person who also appears on the SDN List (OFAC's list of Specially Designated Nationals and blocked persons) still requires a separate OFAC specific licence – or must route the payment in a currency that avoids the US financial system entirely. The two authorisation processes are legally independent and must run in parallel if both jurisdictions are engaged.
The position is comparable, though procedurally distinct, with UK and EU restrictions. A payment that touches a UK-connected bank or a euro-clearing mechanism may require parallel review under OFSI guidance or the relevant EU Council regulation. The principle that applies across all of these regimes is the same: whichever regime imposes the stricter prohibition governs the transaction. Swiss authorisation alone will not suffice if the stricter prohibition belongs to another regime.
The position above covers the standard case. Your facts – the counterparty, the currency route, the intermediary institutions, the ordinances in play – change the analysis materially. For a confidential review of a pending payment, contact Calder & Vance at info@caldervance.com.
What are the most common pitfalls in SECO payment authorisation requests?
The most common reason a SECO payment authorisation fails is not that the transaction is impermissible – it is that the submission does not give SECO what it needs to exercise its discretion confidently. Five failure patterns recur with enough regularity that every applicant should check against them before submitting.
Incomplete ownership analysis. The request identifies the listed person but does not trace the flow of funds through the full ownership structure to show that no other listed person benefits from the payment. SECO needs to see the analysis, not just the conclusion.
Missing contractual foundation. The applicant asserts that the payment discharges a pre-existing obligation but does not attach the contract, the invoice, or the correspondence that establishes when the obligation arose and why it cannot be deferred. Without the documents, the ground for authorisation is unsubstantiated.
Wrong ordinance cited. The request cites the wrong legal instrument – often because the compliance team identified the EU regulation first and assumed the Swiss ordinance was identical. The Swiss legal basis must be correct; SECO applies Swiss law.
No pre-submission contact with SECO. Applicants who submit without any prior dialogue lose the opportunity to shape the request around SECO's current evidential expectations. Regulatory practice evolves, and a brief pre-submission call or written enquiry can be the difference between a clean approval and a round of supplementary questions.
No parallel OFAC / OFSI review. The authorisation request is prepared in isolation without checking whether the transaction also triggers US or UK obligations. By the time a SECO approval arrives, the OFAC or OFSI issue has already caused a breach at the correspondent bank level.
Is there a sixth pattern? In a sense, yes: treating the authorisation process as a one-time event rather than a continuing obligation. Where SECO grants an authorisation subject to conditions – reporting requirements, limitations on amount, or a time boundary – the applicant must comply with those conditions precisely. A breach of a SECO condition is itself a sanctions violation, potentially more serious than the original restriction.
How does the SECO process compare with OFAC, OFSI, and the EU?
Switzerland's payment authorisation process sits within a family of comparable mechanisms across the major regimes, but it has features that distinguish it in ways that matter to a cross-border business managing simultaneous exposures.
Under OFAC, a payment that would otherwise be prohibited requires either a specific licence (a case-by-case authorisation to conduct an otherwise prohibited transaction) or coverage under a general licence (a standing authorisation that permits a defined category of transactions without a separate application). OFAC publishes its general licences in detail, and practitioners regularly rely on them for humanitarian payments, personal remittances, and certain journalistic or legal-fee categories. Switzerland has no directly equivalent published general-licence system for all of its ordinances; the authorisation is more often case-by-case, requiring individual assessment. This makes the Swiss process less predictable in timing but sometimes more flexible in scope, because SECO retains broader administrative discretion to consider unusual fact patterns.
Under OFSI, specific licences are available across UK thematic and country-specific sanctions regimes. OFSI publishes licensing grounds in its guidance, which provides a structured menu of available justifications. The UK process is comparably document-intensive, and OFSI also conducts pre-application dialogue. One material difference is enforcement posture: OFSI has published a monetary-penalty regime with a public register of penalty decisions, which has sharpened the awareness of financial institutions operating under UK law. SECO's enforcement record is less publicly detailed, though Swiss criminal liability for ordinance breaches is real and should not be discounted.
Under EU Council regulations, the general structure mirrors the UK in several respects – competent authorities in each member state issue licences based on grounds set out in the regulation, and those grounds are broadly harmonised. However, member-state practice varies: the speed and evidential standards applied by competent authorities in different member states differ considerably. Switzerland, outside the EU, applies its own regime, and a transaction that has received an EU-level authorisation from a member-state authority has no legal effect in Switzerland. The Swiss authorisation must be sought separately.
What this means in practice for a cross-border business: if a payment touches Switzerland, the EU, the UK, and the US simultaneously – which is not unusual for a multi-leg trade-finance transaction – up to four separate authorisation processes may run in parallel. The filing sequence matters. Starting with the jurisdiction that has the longest decision timeline, while simultaneously flagging the matter to all relevant institutions, is generally the right approach. We regularly advise clients on exactly this sequencing question and the interaction between SECO, OFAC, OFSI, and EU member-state competent authorities.
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.
Practical steps before the authorisation request is submitted
A well-prepared authorisation request does not begin at the point of submission. It begins at the point of first identification of the potential restriction – and the steps taken in that interval determine whether the submission is clean or corrective.
The first practical step is a rapid legal determination: is the transaction prohibited, by whom, and under which instrument? This is not a screening question alone; it is a legal analysis. Screening tools flag names; legal analysis determines whether the prohibition actually bites on the specific transaction structure.
The second step is internal escalation and transaction freeze. The payment should not proceed while the analysis is pending. The team should record the moment of identification, the steps taken, and the basis for the freeze decision. That contemporaneous record will matter if SECO – or any other authority – later asks about the timeline of the firm's response.
Third, notify the relevant financial institutions. The correspondent bank, the domestic bank, and any payment-service provider in the chain should be informed that the transaction is under review. This both meets the institution's independent legal obligations and prevents an inadvertent release of the payment by a downstream party who has not been briefed.
Fourth, conduct the ownership and control analysis. Map the complete ownership chain for both the payer and the payee. Identify every listed person who has an ownership or beneficial interest in either entity. Calculate whether any listed person holds 50 percent or more directly or in aggregate. Where the Swiss ordinance applies a control test as well as an ownership test – and practitioners should check whether the specific ordinance does – extend the analysis to control relationships.
Fifth, identify the authorisation grounds. Based on the legal analysis and the documented facts, select the authorisation ground or grounds most supported by the evidence. Draft the request around those grounds, attaching every document that substantiates the claim. Do not include speculative arguments that are not supported by documentation; they dilute the submission without adding legal weight.
Sixth, consider pre-submission engagement with SECO. A brief written or telephone enquiry before the formal request can clarify procedural expectations and flag any recent developments in SECO's approach to similar requests. SECO's divisions dealing with sanctions authorisations are accustomed to pre-submission dialogue from practitioners.
Seventh, file simultaneously across all relevant regimes. Do not wait for the SECO response before filing with OFAC or OFSI if the transaction also triggers those regimes. Simultaneous filing, with cross-references where appropriate, demonstrates to all regulators that the business is managing the matter comprehensively.
When should you involve external sanctions counsel?
Many compliance teams handle straightforward SECO notifications independently. The cases that benefit most from external counsel are those where the legal analysis is contested, the transaction structure is complex, the ownership chain is opaque, or multiple regimes are simultaneously engaged.
A common myth is that SECO payment authorisations are an administrative formality – that the process is essentially a notification, and that approval follows as a matter of course if the payment is commercially reasonable. In our experience, this underestimates both the evidential burden and the discretionary element of SECO's assessment. SECO will weigh the risk that the payment benefits a listed person, the adequacy of the applicant's own controls, and whether the authorisation is consistent with the objectives of the relevant ordinance. Those are substantive judgments, not administrative checks.
External counsel adds most value in four situations. First, where the ownership analysis is complex and the legal determination of whether the prohibition bites is itself uncertain. Second, where parallel OFAC, OFSI, or EU processes are required and the interaction between them needs to be managed strategically. Third, where the application has already been submitted and SECO has raised supplementary questions that require a legally reasoned response. Fourth, where a prior payment may have been made without authorisation and the firm is assessing whether to make a VSD (voluntary self-disclosure to a regulator) – a step that has significant consequences for how any enforcement response unfolds.
We have acted for financial institutions, trading firms, and corporate treasury teams across all four of these situations. The question is not whether your internal team is competent; it is whether the specific facts of your transaction require a level of multi-regime legal analysis that is most efficiently done by practitioners who work across these regimes daily.
Related practices
- Frozen account management under BIS / EAR – managing blocked accounts and release procedures under US export controls
- Payment authorisations under Singapore's sanctions regime – comparative guide for cross-border payments touching MAS-administered restrictions
- Advanced Singapore payment authorisation issues – deeper analysis of complex multi-leg payment structures under the Singapore regime