A trading company headquartered in Geneva holds a long-standing contract with a supplier. Overnight, the supplier's parent is added to Switzerland's sanctions ordinances. Payments are blocked, goods in transit are held, and the contract cannot simply be abandoned without triggering further legal exposure. The business has days – not weeks – to act. The question is not whether to engage SECO; it is how to do so before the window closes.
Wind-down authorisations under SECO (Switzerland's State Secretariat for Economic Affairs) permit businesses to complete, terminate, or partially unwind transactions and contractual relationships that became prohibited when a new designation took effect. The legal basis sits in Switzerland's applicable sanctions ordinances, which SECO administers. As of June 2026, SECO's licensing practice has tightened in response to broader multilateral coordination, and applicants should treat preparation time as shorter than it may appear.
This guide walks through the applicable authority and legal basis, the pre-application steps, the procedure for submitting a wind-down request, the cross-regime comparison that matters for multinationals, the most common errors, and when to bring in sanctions counsel.
What authority governs wind-down authorisations in Switzerland?
SECO administers Switzerland's economic sanctions programme under the applicable national sanctions legislation and the ordinances that give effect to measures aligned with UN Security Council resolutions and, in certain cases, EU Council decisions. SECO holds both the licensing and enforcement functions – it is the authority that authorises, monitors, and, where necessary, investigates apparent violations.
The wind-down authorisation is a specific sub-category of the licensing mechanism. It is distinct from a general trading licence or a humanitarian exemption. Its purpose is narrow: to permit an otherwise prohibited payment, delivery, or contractual performance to the minimum extent necessary to conclude or exit a relationship in an orderly and documented manner. SECO does not treat wind-down as a commercial convenience. The burden rests on the applicant to demonstrate that the transaction is genuinely terminal – that it closes exposure rather than extending it.
Switzerland's programme is also shaped by its alignment policy. SECO has, at different points, adopted measures that track the EU Consolidated List and UN Security Council designations. That alignment creates a secondary issue for multinationals: a SECO wind-down authorisation does not resolve parallel obligations under OFAC, OFSI, or the EU regulations. Those must be addressed separately, a point addressed later in this guide.
In our cross-border practice, we see businesses underestimate SECO's institutional capacity. SECO is not a passive rubber-stamp; its analysts review ownership-and-control questions, end-use representations, and the completeness of the underlying documentation with care. Partial or ambiguous applications are rejected, not queried and returned – which means the clock keeps running on the designation while the file is reassembled.
Step 1 – Assess whether the transaction qualifies for a wind-down route
Before any application is prepared, the first task is to confirm that the relevant transaction is genuinely eligible for a wind-down authorisation rather than a different licensing category or an applicable exemption.
A wind-down authorisation is appropriate where three conditions are present. First, the underlying contractual obligation or payment was lawful at inception – before the designation that triggered the block. Second, performance is now prohibited by the applicable Swiss ordinance because a party, an asset, or a jurisdiction has become subject to sanctions. Third, the applicant seeks to conclude – not continue – the relationship, and the proposed action is the minimum necessary to reach that conclusion.
If the obligation arose after the designation, a wind-down authorisation is not available for that element. If the applicant is seeking to preserve an ongoing commercial relationship rather than exit it, a wind-down authorisation is not the right instrument. In our experience, the most common threshold error at this stage is attempting to characterise a continuing performance obligation as a wind-down when SECO will read it as a request to trade through the sanctions. That characterisation will doom the application.
Practical items to assess at this stage include: the exact date the designation took effect and how that maps against the contractual milestones; the identity of all parties directly and indirectly involved in the transaction, including intermediate banks and freight principals; and whether any exemption in the underlying ordinance already permits the action without a licence. Counsel should be involved at this point if there is genuine doubt about any of these questions.
Step 2 – Map the ownership and control chain
Ownership and control (the test under Swiss, EU, and UK rules for whether a non-listed entity is caught through a listed person's interest) is the single most consequential analytical step in a SECO wind-down application. If the counterparty is not itself designated but is owned or controlled by a designated person, the transaction may be prohibited even in the absence of a direct designation.
Switzerland's ordinances apply to entities owned or controlled by a designated person, not only to the designated person directly. The control concept is fact-specific. It looks beyond formal ownership percentages to contractual rights, board representation, veto rights, and the practical ability of the designated person to direct the entity's conduct. This is a broader test than the mechanical 50 percent ownership threshold OFAC applies under its framework. A counterparty that sits below the fifty percent mark may still be caught if control is exercised through other means.
At this step, the applicant must produce an ownership chart tracing the full chain from the ultimate beneficial owner through to the immediate contractual counterparty. SECO expects this chart to be current and sourced. A chart based on commercial registry data that is eighteen months old will not satisfy the requirement. Where ownership registers in the relevant jurisdiction are unreliable or incomplete, that limitation must be acknowledged in the application, along with a description of the steps taken to verify.
The cross-border implication is material. An EU-regulated entity involved in the same transaction will need to run the same analysis under EU Council regulations, which have their own ownership-and-control definitions. An OFSI-regulated counterparty will need to apply the UK ownership-and-control test. All three tests share the same general structure but differ in their precise formulations. We regularly advise on coordinating these analyses so that a single factual record serves multiple parallel applications – which reduces cost and eliminates the risk of inconsistent representations to different regulators.
Step 3 – Prepare and submit the wind-down application to SECO
A SECO wind-down application is a formal administrative submission, not a letter of inquiry. It requires a structured presentation of facts, legal analysis, supporting documentation, and a precise description of the proposed transaction.
The core elements SECO expects are: a clear identification of the designated person or entity involved, with the relevant list entry cited; a description of the contractual relationship, its formation date, and the obligations sought to be discharged; the ownership and control analysis described in Step 2; a statement of the specific funds, goods, or services to be transferred or received; the proposed counterparties and their bank details; and a declaration that the transaction is the minimum necessary to conclude the relationship. Supporting documentation – contracts, invoices, shipping documents, corporate registry extracts, and bank correspondence – must be annexed in full.
SECO does not publish a standard-form application template for wind-down requests in the way that OFAC publishes its online application portal, or OFSI provides written-guidance templates. The application is drafted to SECO's published guidance and its known expectations from practice. This is one reason why experienced counsel adds significant value: the application architecture matters as much as the facts, and an application that is complete and well-ordered is processed more quickly than one that requires follow-up queries.
Timelines are not published by SECO as binding commitments. In our experience, well-prepared applications on straightforward fact patterns are addressed within a period that, while meaningful, can be substantially longer than applicants expect. Complex cases, or cases involving novel legal questions on ownership and control, take longer still. The applicant bears the cost of the waiting period: the transaction remains frozen while the application is under review.
How does SECO differ from OFAC, OFSI, and the EU on wind-down?
For a multinational managing a sanctions disruption across several jurisdictions, the practical question is not only how to obtain a SECO authorisation, but how Switzerland's approach compares with the other regimes that may apply simultaneously.
OFAC's approach to wind-down is the most formalised. OFAC publishes general licences – standing authorisations permitting defined categories of wind-down transactions without a separate application – when it imposes new programmes. These general licences specify a period (often measured in a short number of days) during which certain payments and transfers may be completed. They are subject to strict conditions and record-keeping obligations. A specific licence (a case-by-case authorisation to conduct an otherwise prohibited transaction) is available where the general licence does not cover the relevant activity. OFAC's licensing operation also has a public-facing application portal and a published volume of precedent decisions.
OFSI (the UK's Office of Financial Sanctions Implementation) operates a specific licensing system without the general-licence layer that OFAC uses. OFSI's published wind-down licence category permits certain transactions to conclude existing obligations, subject to conditions including notification and record-keeping. OFSI has a shorter licensing timeline than OFAC for straightforward cases, though complex matters extend considerably.
The EU operates through two layers. The relevant Council regulation may include its own exception for winding down existing contracts, subject to prior notification to the competent authority of the member state. Where no such exception applies, a specific authorisation must be sought from the member state's national competent authority, applying the EU regulation's own test. The EU General Court is the route for challenging the legality of the underlying designation itself, but that is a distinct proceeding from the licensing track.
SECO's position sits closest to the EU model. Switzerland does not use a general-licence layer for wind-down. Every wind-down request is assessed on its specific facts. The alignment of Switzerland's lists with EU and UN lists means that, in many cases, the same underlying designation is driving parallel obligations in Bern, Brussels, and London. Coordinating applications across these authorities – with consistent factual representations – is the operating challenge that multinationals face. The stricter prohibition governs: where one regime's conditions are more demanding than another's, the business must comply with the more restrictive requirement across its entire operation.
What are the most common errors and risk flags?
Wind-down applications fail, are delayed, or attract adverse attention for a consistent set of reasons. Identifying these before submission prevents the most costly mistakes.
The first risk is an incomplete or inaccurate ownership analysis. SECO will assess the application against its own intelligence on the designated person's network. Where the applicant's ownership chart omits a known intermediate entity, or presents stale data, SECO's query will stop the clock on the application and may prompt a broader inquiry. Accuracy at the outset is cheaper than correction under scrutiny.
The second risk is characterising continuation as conclusion. An application that seeks to complete a delivery in circumstances where the delivery creates or preserves a future commercial relationship is not a wind-down. SECO distinguishes between obligations that were in progress at the date of designation and new obligations that would arise from performance. Applicants sometimes draw this line at the wrong point – typically because their commercial teams have not been separated from the application preparation process.
The third risk is incomplete documentation. A contract summary is not the contract. A bank letter referencing blocked funds is not a bank statement. SECO requires primary source materials. Annexes that are partial, redacted beyond necessity, or translated without a certified translation will generate queries.
The fourth risk is parallel-regime inconsistency. An applicant that represents to SECO that the transaction concludes on one date, and to OFAC that it concludes on a different date, creates a record problem that is difficult to resolve. All applications should proceed from a single verified factual record, prepared before any submission is made.
Fifth – and in our experience the most underestimated risk – is the failure to report. Several Swiss ordinances carry an obligation to notify SECO of frozen funds or assets above a defined value, separately from and in addition to any wind-down application. A business that identifies a blocking obligation, proceeds directly to wind-down application, and omits the prior notification step may find that it has created a compliance violation even while attempting to regularise the position.
When should a business involve sanctions counsel?
The answer to this question is almost always: earlier than you think. In our experience, the matters that become contentious before SECO are those where the applicant spent the first week managing the situation internally before briefing counsel. That week is rarely recovered.
There are specific triggers that should prompt immediate engagement. A designation affecting a party to a live contract with pending payment or delivery obligations is the clearest trigger. So is a designation affecting an entity in the applicant's ownership chain – not just a counterparty – which may block the applicant's own assets. A failed or refused application, or a query from SECO following submission, is a third trigger requiring counsel on the record.
Counsel adds value at three points in the SECO wind-down process. At the assessment stage, counsel can confirm the availability of the wind-down route, identify the applicable reporting obligations, and map the cross-regime picture. At the application stage, counsel can structure and prepare the submission to SECO's known standards, coordinate parallel applications to OFAC, OFSI, or EU national competent authorities, and manage the record for consistency. At the post-determination stage, counsel can advise on conditions attached to any authorisation, ensure record-keeping meets the applicable standard, and handle any follow-up inquiry from SECO.
What counsel cannot and will not do is advise on avoiding the sanctions obligations, disguising the ownership of assets, or structuring transactions in ways designed to defeat the controls. That perimeter is non-negotiable. The wind-down route exists within the sanctions regime, not around it. A properly prepared application, by definition, demonstrates that the business is complying with the law rather than evading it.
Related practices
- Frozen account management under BIS and EAR – practical steps for managing blocked assets in US export-control proceedings.
- Wind-down authorisations under the Singapore regime – comparative guide for businesses with APAC exposure.
- Wind-down authorisations: Singapore follow-on analysis – deeper regime-specific comparison for multi-jurisdiction matters.