A Swiss bank freezes an account. The beneficial owner is not on any list. A counterparty named in the transaction chain is. The compliance officer needs to know: can the funds be released? Under what authority? And how long will this take?
The release of blocked funds under SECO (the State Secretariat for Economic Affairs, Switzerland's primary sanctions and export-control authority) is a formal licensing process governed by Swiss embargo ordinances and, where UN Security Council measures apply, by the Swiss implementation of those resolutions. An authorisation to release is neither automatic nor fast. As of June 2026, any business holding assets subject to a Swiss freezing measure that requires release must apply to SECO directly, submit a structured evidentiary package, and satisfy SECO that the release falls within a permitted ground. Every day of delay carries the risk of asset erosion, contractual breach, or secondary regulatory exposure in parallel regimes.
This guide walks through the procedure step by step – from the moment of identification to the point of execution – and highlights the points at which matters most commonly go wrong.
Step 1: Identify the legal basis for the freeze and the applicable ordinance
The first task is to identify precisely which Swiss ordinance is the source of the freezing obligation, because the release procedure and the permitted grounds differ by programme.
Switzerland maintains sanctions programmes through a series of programme-specific ordinances adopted by the Federal Council under the Federal Act on the Implementation of International Sanctions (commonly called the Embargo Act). SECO administers and enforces these measures. Some programmes implement UN Security Council measures directly; others reflect autonomous Swiss decisions that may or may not align with EU Council regulations or OFAC programmes. That distinction matters immediately: a ground for release available under one ordinance may simply not exist under another.
In our cross-border practice, we see firms make a critical error at this threshold stage. They assume that because OFAC or OFSI have authorised a transaction, SECO will follow. That assumption is wrong. Switzerland operates an independent sanctions regime. A US general licence does not lift a Swiss freeze. An OFSI licence does not substitute for a SECO authorisation. Where a business holds assets frozen across multiple jurisdictions, each regime must be addressed separately, and the applications must often proceed in parallel, not in sequence.
Practical action at this step:
- Pull the precise ordinance and the specific programme under which the freeze was imposed.
- Identify whether the freeze stems from a UN Security Council obligation or from autonomous Swiss measures.
- Check whether any autonomous Swiss measure tracks EU Council regulations, because interpretive guidance from the EU General Court can be informative – though not binding – on Swiss analysis.
- Confirm the legal status of each entity and individual in the chain: listed party, controlled entity, or an innocent counterparty caught by aggregation.
Do not move to the application stage until this analysis is complete. A misidentified legal basis produces a misdirected application, which SECO will reject, costing time the business may not have.
Step 2: Assess whether a permitted ground for release exists
Swiss sanctions ordinances provide specific grounds on which a release may be authorised; an applicant must identify and evidence at least one of these grounds before submitting anything to SECO.
The most common grounds across Swiss programmes include:
- Basic needs: payments to cover ordinary living expenses of a designated natural person or their immediate family.
- Legal fees and representation costs: reasonable payments for legal services in connection with the sanctions matter itself.
- Prior contractual obligations: payments due under contracts concluded before the designation, where the counterparty is not itself designated.
- Extraordinary expenses: a narrower ground requiring specific justification and SECO discretion.
- Humanitarian grounds: funds intended for humanitarian purposes, subject to strict conditions.
For business entities – as opposed to natural persons – the prior-contracts ground is the one most frequently invoked. But it is also the ground most frequently challenged by SECO on the evidence. The question is not just whether a contract pre-dates the designation, but whether the counterparty on the other side is itself free of designation or control issues, whether the payment is proportionate to the contractual obligation, and whether the funds in question are the proceeds of a separate transaction unrelated to the designated party's assets.
The ownership-and-control question sits at the heart of the second assessment. Where a designated person owns or controls the entity seeking the release, the release itself may be prohibited. The Swiss test here is closer to the EU ownership and control standard (the test for whether a non-listed entity is captured through a listed person) than to the mechanical OFAC 50 percent rule (which treats any entity owned 50 percent or more by blocked persons as itself blocked, without a control analysis). Under Swiss measures implemented alongside EU programmes, SECO's analysis of effective control can bring in a counterparty that holds well under a majority stake. This is a point of divergence that catches businesses that have modelled their risk only against the OFAC threshold.
Step 3: Assemble the evidentiary package
The quality of the evidentiary package submitted to SECO is the single largest determinant of whether an application succeeds and how long it takes.
SECO is a small, specialist authority. It does not have the volume-processing infrastructure of OFAC or the dedicated licensing units that handle high-traffic EU programmes. Applications that arrive incomplete, or that require SECO to seek clarification repeatedly, slow the queue for everyone. In our experience, a well-structured first submission is substantially more efficient than a faster but incomplete one followed by multiple rounds of correspondence.
A standard evidentiary package for a business applicant seeking release under a prior-contracts ground should include:
- A cover letter in German, French, or Italian (the official Swiss administrative languages) setting out the legal basis, the ground relied upon, and the relief sought.
- A clear corporate ownership chart showing all entities in the chain, with percentage ownership at each level, confirmed as at the date of the application.
- Copies of the underlying contract, the invoice or payment instruction, and any evidence of the pre-designation date of the contractual obligation.
- A declaration that the receiving party is not itself subject to a Swiss designation or controlled by a designated person.
- Bank statements or account records sufficient to show the source of the blocked funds and their segregation from any other assets.
- Where relevant, any prior correspondence with SECO or other authorities on the matter.
If a multi-jurisdictional dimension exists – for instance, where the underlying contract involves a US-regulated counterparty or where the funds are held partly in an EU-regulated account – the package should also include a summary of the position under those other regimes and copies of any licences or authorisations already obtained. SECO does not formally co-ordinate with OFAC or EU authorities before deciding, but demonstrating that the parallel positions have been considered signals to SECO that the applicant is acting in good faith.
Step 4: Submit to SECO and manage the review process
Once the package is complete, the formal application is submitted to SECO's Sanctions Section. The review period is not fixed by statute and varies in practice depending on the programme, the complexity of the facts, and SECO's current workload.
Applicants should not assume that silence means progress. SECO may issue a request for additional information at any point in the review. That request restarts the practical clock. A business that does not monitor the application file and respond promptly to any request risks a process that extends well beyond what the underlying contractual or commercial position can sustain.
Interim steps that can be taken while the application is pending include:
- Notifying counterparties of the regulatory position in writing, to document that any delay in payment or delivery is legally compelled and not a commercial decision.
- Taking advice on whether a force majeure or sanctions-hardship clause in the underlying contract applies, and documenting that assessment.
- Monitoring the designation status of all parties in the chain, because a delisting while the application is pending changes the analysis entirely.
- In complex cases, requesting an informal pre-submission meeting with SECO. This is not always granted, but SECO has historically been willing to engage on genuinely novel or technically complex matters, and a pre-submission exchange can prevent a formal rejection.
What constitutes an acceptable timeline? The honest answer is that timelines differ materially across programmes and fact patterns. Straightforward basic-needs releases for natural persons under clear ordinance authority tend to move faster than multi-party business applications under autonomous Swiss measures. We regularly advise clients to build contingency planning around a process measured in weeks to months, not days.
What are the most common pitfalls in a SECO release application?
Several errors recur in SECO release applications, and understanding them in advance is the most cost-effective form of preparation.
First: submitting without a confirmed legal ground. Some applicants file on the general basis that the freeze is causing them harm, without anchoring the application to a specific permitted ground under the relevant ordinance. SECO has no discretion to release simply because the freeze is commercially painful. The application must map to a statutory ground. A submission that does not do this will be refused.
Second: incomplete ownership analysis. Applicants regularly underestimate the depth of the ownership enquiry SECO expects. A first-level chart that shows only the direct shareholder but does not trace the chain through holding companies and trusts is insufficient. SECO will ask for the full chain. Submitting it voluntarily, upfront, is always better than producing it in response to a query weeks later.
Third: assuming that a release under another regime removes the Swiss obligation. As noted above, a US general licence, an OFSI specific licence, or an EU authorisation does not lift the Swiss freeze. Each is a separate instrument with separate territorial and personal scope. We have acted for businesses that treated an OFAC authorisation as dispositive, only to find the Swiss position entirely open and the commercial timeline already lost.
Fourth: linguistic errors. Switzerland's administrative proceedings are conducted in the official languages. An application submitted exclusively in English may be returned or may cause delay. Legal documents submitted in translation should be accompanied by a professional translation certificate.
Fifth: missing the cross-border exposure entirely. Where the frozen funds form part of a larger transaction touching OFAC-regulated counterparties or EU-regulated banks, the release – even if authorised by SECO – may still require parallel clearance. Executing a release without that clearance can create liability under another regime even while the Swiss position is resolved.
How does the SECO procedure compare with OFAC and OFSI?
Comparing the SECO release procedure with those of OFAC and OFSI is essential for any business operating across multiple jurisdictions, because the three regimes differ materially in structure, timelines, and the breadth of available grounds.
Under OFAC, the primary mechanism for releasing blocked funds is a specific licence (a case-by-case authorisation to conduct an otherwise prohibited transaction) or reliance on a general licence (a standing authorisation that permits a defined category of transactions without a separate application). OFAC's licensing process is formally structured, with a dedicated licensing office. The OFAC process does not require submission in any particular language. Timelines vary by programme and complexity, and OFAC publishes general licence texts that can sometimes be applied directly without a separate application. SECO has no equivalent general-licence infrastructure; every release is case-specific.
Under OFSI, the licensing process for releasing frozen funds is similarly case-specific. OFSI issues licences under specific licensing grounds set out in the thematic UK sanctions regulations. OFSI has historically engaged with applicants through a structured correspondence process, and it publishes enforcement guidance that informs the standard of evidence expected. One notable difference: OFSI applies the ownership and control test to determine whether a non-listed entity is caught, which – like the SECO approach – goes beyond the purely mechanical OFAC threshold. However, OFSI's control analysis and SECO's are not identical, and a business that passes the OFSI test may still face a SECO objection on control grounds, or vice versa.
A further cross-regime consideration: where funds are held by a Swiss financial institution that also has operations or correspondent relationships in the United States or the European Union, that institution's own compliance policies may impose additional requirements beyond what the relevant regulatory regime strictly requires. In our cross-border practice, we regularly see Swiss-held funds delayed not because SECO has refused release, but because the holding bank's internal compliance function requires additional sign-offs that go beyond the SECO authorisation. This is a practical reality that the release application alone does not address.
Is the Swiss system harder to use than OFAC or OFSI? Not inherently – but it is smaller, less formally codified in terms of published guidance, and requires a higher degree of applicant preparation to use efficiently. The absence of standing general licences means that no shortcut exists for most business applicants.
Related practices
- BIS/EAR frozen account management – assessing licence requirements and managing BIS-related account issues across US export-control programmes.
- Release of blocked funds under Singapore's regime – step-by-step guide to MAS licensing and release procedures for frozen funds in Singapore.
- Blocked funds in Singapore: advanced considerations – ownership and control analysis, parallel-regime exposure, and escalation routes for complex cases.
When should you involve sanctions counsel?
Not every SECO matter requires external counsel from day one. But several situations make early involvement of a sanctions lawyer not a discretionary luxury, but a practical necessity.
Involve counsel immediately if:
- The designated party is connected to the blocked account through a chain of more than two intermediate entities, or through a trust or other opaque structure.
- The funds are held across more than one jurisdiction and parallel applications are required.
- The underlying contract involves a counterparty that itself has US, UK, or EU sanctions exposure.
- SECO has already issued a query or a preliminary refusal.
- The commercial deadline for the underlying transaction is short and the cost of delay is material.
- The release is opposed or contested by another party to the account.
Involve counsel at the drafting stage – before submission – if the application involves a prior-contracts ground that requires careful evidence of the pre-designation contractual date, or if the ownership chain includes any party incorporated in a high-risk jurisdiction where corporate registry information is limited.
The bridge from analysis to action is narrow in a SECO release matter. SECO's process does not pause for applicants who are still assembling their case after submission. If a transaction has already been flagged or a bank has already frozen an account, an early review can preserve options that narrow quickly.
For a confidential review of your position under the Swiss regime, contact Calder & Vance at info@caldervance.com.