A Swiss-based commodity trader is reviewing a proposed transaction with a counterparty in a market subject to Swiss restrictive measures. The compliance team identifies that certain goods may require authorisation before shipment. The immediate question is not whether a licence is needed – it almost certainly is – but which type applies, and how long the business has before the window closes.
Choosing between specific and general licences under SECO rules is a practical decision that turns on the scope of the transaction, the identity of the counterparty, and the nature of the goods or financial service involved. Switzerland's State Secretariat for Economic Affairs (SECO) administers both instruments under the relevant embargo and export-control ordinances. General licences permit defined categories of transaction without a case-by-case application; specific licences authorise individual transactions and require a reasoned submission to SECO. As of June 2026, the distinction is outcome-critical: using a general licence where a specific licence is required leaves a transaction unlawfully executed.
This briefing sets out the legal authority, explains the two licence types, describes the submission process, flags where the Swiss position diverges from OFAC, OFSI, and EU mechanisms, and identifies the risk factors that make early legal review essential.
Who administers SECO licences and what is the legal basis?
SECO is Switzerland's competent authority for economic sanctions and export controls, acting under the Federal Act on the Implementation of International Sanctions (the Embargo Act) and the parallel export-control ordinances. The relevant thematic ordinances – covering financial sanctions, trade restrictions, and targeted measures against designated persons and entities – define both the prohibitions and the licensing exceptions. SECO holds the power to grant, refuse, and revoke licences for goods, services, technology, and financial transfers that would otherwise fall within a prohibition.
Within the Swiss constitutional structure, the Federal Council sets the sanctions policy and issues the ordinances. SECO implements those ordinances at the transaction level. Appeals against SECO decisions go to the Federal Administrative Court, and further to the Federal Supreme Court on points of law. This creates a defined administrative-law track that differs structurally from the OFAC administrative-review process and from the EU General Court annulment route.
Switzerland is not a member of the European Union. It does not automatically adopt EU Council regulations. Instead, it assesses whether to align its restrictive measures on a case-by-case basis, ordinance by ordinance. The result is a regime that tracks EU measures on some matters and diverges on others. That divergence is operationally significant: a business relying on an EU general authorisation for a given transaction cannot assume an equivalent Swiss pathway exists, and vice versa. We regularly advise clients who discover this difference only after the EU authorisation has been drafted.
What is a general licence under SECO, and when does it apply?
A general licence under Swiss practice is a standing authorisation embedded in the relevant ordinance or issued by SECO as a published instrument, permitting a defined category of transactions without requiring the applicant to submit an individual case file. It is the Swiss functional equivalent of an OFAC general licence or a UK OFSI general licence, though the categories authorised and the conditions attached differ materially between regimes.
General licences typically cover transactions that are low-risk, humanitarian in character, or necessary to preserve existing contractual rights during a wind-down period. Typical categories include the provision of basic banking services to natural persons, remittances for personal maintenance, food and medicine trade, and certain diplomatic transactions. The scope of any given general licence is set by its text. A business that relies on a general licence without reading its conditions in full – including carve-outs for designated persons, value thresholds, and reporting obligations – exposes itself to enforcement risk even though it never submitted an individual application.
This point is not theoretical. In our cross-border practice, we have advised clients who applied a general licence to a transaction that fell within an excluded sub-category. The goods were permissible, but the end-user was a person subject to a financial sanction, which the general licence expressly excluded. The transaction had to be reversed at cost, and SECO was notified. General licences are tools of precision, not blanket clearances.
Does a general licence require any interaction with SECO? Ordinarily, no prior approval is needed. However, some general licences carry a notification or record-keeping obligation: the authorised party must retain transaction records and, in certain cases, report usage within a defined period. Verify the specific instrument's conditions before relying on it.
What is a specific licence under SECO, and how does the application work?
A specific licence (in Swiss practice, an individual authorisation) is a case-by-case permission granted by SECO following a written application. It is required for any transaction that falls within a prohibition and is not covered by an applicable general licence. It is the appropriate route when the transaction is novel, when the counterparty or end-user is a designated person or entity, when goods are dual-use or otherwise controlled, or when no general licence is published for the relevant category.
The application must set out the parties, the goods or services, the value, the destination, the end-use, and the legal basis on which the applicant contends the licence should be granted. SECO may request supporting documentation: end-user certificates, corporate structure charts, contracts, or evidence of the humanitarian or commercial rationale. Incomplete applications extend processing time. A well-prepared submission is materially shorter in elapsed time than a deficient one that triggers a series of information requests.
SECO does not publish a fixed statutory deadline for decisions on specific-licence applications. Processing time varies with the complexity of the transaction and the workload of the relevant desk. Applicants should build a realistic buffer into their deal timeline. We advise clients to treat specific-licence applications as a parallel workstream to commercial negotiation, not a post-signature formality. By the time a contract is signed, the relevant prohibitions are engaged; the transaction cannot lawfully proceed without the authorisation in hand.
One structural difference from OFAC and OFSI practice is worth noting. OFAC specific-licence applications are submitted through an online portal with defined processing tracks. OFSI operates a similar online system with published service standards. SECO's process is document-based and involves direct correspondence with the relevant desk. This means that personal dialogue with SECO – clarifying what the authority needs and addressing its concerns in real time – can accelerate the outcome in a way that is less reliably available under OFAC.
Related practices
- Frozen account management under BIS / EAR – legal support for managing assets frozen under US export-control regimes
- Wind-down authorisation under BIS / EAR – how wind-down licences operate under the US Export Administration Regulations
- Wind-down authorisation under EU sanctions – the EU framework for authorising orderly exit from prohibited transactions
How do Swiss licence categories compare with OFAC, OFSI, and EU mechanisms?
The general/specific distinction is structurally common to all four major Western regimes. The practical divergences, however, are significant enough to affect cross-border transactions where multiple regimes apply simultaneously.
Under OFAC, general licences are published in the Code of Federal Regulations and on OFAC's website; they are self-executing and require no prior notification in most cases. Specific licences require a formal application and carry an average processing time that varies considerably by programme. OFAC's 50 percent rule (the rule treating entities owned 50 percent or more by blocked persons as themselves blocked) interacts directly with licence eligibility: if a counterparty is blocked under the 50 percent rule, a specific licence is required before any transaction proceeds, and eligibility is not guaranteed.
Under OFSI, general licences are published by HM Treasury and are self-operative within their terms. Specific licences are granted on a case-by-case basis following an application to OFSI. The UK ownership-and-control test is broader than OFAC's mechanical ownership rule: control – the ability to direct or influence – can catch entities that are not majority-owned by a designated person. A transaction that clears the Swiss and OFAC analysis may still require an OFSI specific licence if a designated person exercises control over the counterparty without holding a majority stake.
EU general authorisations are published in Council regulations and are self-executing. Case-by-case authorisations are granted by the competent authority of the relevant member state, not by the Council directly. Where a transaction involves parties in multiple EU member states, the authorisation-granting competent authority may differ by jurisdiction. Switzerland, sitting outside the EU, issues its own authorisations through SECO; an EU member-state authorisation does not extend to the Swiss side of the transaction.
The practical consequence for a business with operations in Switzerland and one or more EU member states is that the same deal may require a SECO-issued authorisation and a member-state competent-authority authorisation simultaneously. Timing the two parallel applications – and ensuring that the conditions of each are compatible – is a material compliance task. A stricter condition in one regime governs the conduct of the whole cross-border transaction; the parties cannot elect the more permissive regime.
What are the risk flags when choosing between specific and general licences?
Misclassification – applying a general licence to a transaction that actually requires a specific licence – is the most common enforcement trigger in this area. The risk arises in four recognisable patterns.
First, the counterparty has changed. A general licence that permitted transactions with a particular sector or category of person may no longer apply if a party in the chain has since been designated. SECO's list of designated persons is updated at irregular intervals, and a periodic transaction stream that was covered by a general licence at inception may have crossed the line without the compliance team being alerted.
Second, the goods or technology have been reclassified. Export-control classifications can shift when a product is upgraded or repurposed. A shipment that previously fell within an uncontrolled category may now carry a classification that requires a specific authorisation. Dual-use goods are particularly susceptible to this: software updates, hardware modifications, and new end-use statements can all change the licensing picture.
Third, the transaction value or volume has exceeded a general licence threshold. Some general licences cap the aggregate value of transactions authorised over a given period. A business that tracks individual transactions but not its cumulative position under a capped general licence can inadvertently exceed the permitted total.
Fourth, the business has assumed that Swiss authorisation covers the whole supply chain. Swiss general licences bind Swiss-resident entities. Non-Swiss entities in the same supply chain – a German subsidiary, a Singapore-incorporated trading vehicle, a UK parent – remain subject to their own regimes. The SECO authorisation does not travel with the goods.
If any of these patterns applies, a specific-licence application – or a breach notification to SECO – may be required. An early assessment preserves options that narrow with time. To discuss a licence application or a potential breach, write to info@caldervance.com.
When is a specific licence application unavoidable?
A specific-licence application is unavoidable when no applicable general licence exists for the transaction, when a general licence expressly excludes the counterparty or goods in question, or when SECO has indicated in published guidance that a specific authorisation is required for the relevant category.
It is also required when a designated person or entity is a party to the transaction, even if that person's role is limited (for example, as a beneficial owner rather than a direct contractual counterparty). Switzerland's ownership-and-control test, embedded in the relevant ordinances, captures entities that a designated person owns or over which they exercise determinative influence. A business that transacts with such an entity without a specific licence is in violation, regardless of whether it was aware of the ownership connection.
Specific licences are also the correct route for wind-down transactions: where a business needs to execute residual contractual obligations, close out positions, or repatriate funds after a designation has taken effect. Wind-down authorisations under Swiss practice are time-limited. They do not reopen the underlying transaction; they permit an orderly exit. The application must set out the specific obligations to be discharged, the amounts, and the timeline. Vague or open-ended wind-down applications are routinely challenged by SECO with requests for further information, which adds time the business may not have.
In a recent matter, a financial institution in a cross-border transaction discovered mid-process that the counterparty's parent had been added to SECO's list of designated persons. A general licence had covered the initial phase of the transaction. That general licence excluded entities controlled by designated persons. We assessed the ownership chain, confirmed that the specific-licence route was necessary, and prepared the submission to SECO in parallel with a notification under the applicable reporting obligation. The matter was resolved on an expedited basis. No guarantee of any outcome can be given; the facts of each case determine the result.
What are the reporting and record-keeping obligations associated with licences?
Both general and specific licences under Swiss practice carry compliance obligations beyond the initial authorisation. Ignoring them after the licence is granted is a common source of enforcement exposure.
General licences may require the authorised party to keep records of each transaction conducted under the instrument and to make those records available to SECO on request. Some general licences require periodic or transaction-level reporting. The obligation is typically stated in the text of the instrument. Where it is not explicit, the general principle under Swiss administrative law is that the authority retains the right to audit compliance with any authorisation it has granted.
Specific licences routinely include conditions on reporting. A business authorised to conduct a particular financial transfer may be required to confirm execution within a defined number of days and to provide SECO with transaction confirmation documents. Conditions can also include post-shipment verification obligations for goods: proof that items reached the authorised end-user rather than being diverted. Failure to satisfy a licence condition is treated as a violation of the underlying prohibition, not merely a procedural shortcoming.
Record-keeping for Swiss sanctions purposes follows the standards applicable in the broader Swiss financial and commercial regulatory environment. Businesses should maintain complete records – contracts, payment instructions, shipping documents, end-user certificates, and all SECO correspondence – in a form that can be produced promptly in the event of an audit. We advise clients to treat SECO licence files as live compliance documents, not archived paperwork, for as long as the authorised transaction remains open and for a defined period thereafter. Verify the applicable retention period under the current ordinances before setting your document-management policy.
The cross-regime record-keeping point deserves attention. If the same transaction is covered by both a SECO authorisation and an OFSI specific licence, each authority's record-keeping requirements apply independently. The UK requirement and the Swiss requirement may differ in duration and in the format of records. The stricter of the two governs what the business must in practice retain.
A common misconception: is a general licence always the simpler option?
The prevailing assumption among compliance teams encountering SECO for the first time is that a general licence is always preferable – quicker, cheaper, and lower-risk. This assumption is wrong in a specific and important way.
A general licence is simpler to use only if the transaction falls squarely within its scope. If there is any doubt – about the counterparty's status, the classification of the goods, the value ceiling, or the excluded categories – relying on a general licence without analysis creates exposure that a specific-licence application would have avoided. A specific licence, once granted, is authoritative for the transaction it covers. A general licence relied upon incorrectly provides no defence.
The operational implication is that the choice between a general and a specific licence should be made on the basis of a documented legal analysis, not a reflexive preference for the faster route. The analysis should be refreshed whenever the facts of the transaction change. A change in counterparty, a change in goods, a change in the designation list, or a change in the published ordinances can each move a previously covered transaction outside the scope of the general licence.
We have seen this dynamic play out in M&A contexts as well. A target company operating under a SECO general licence across its supply chain may be operating lawfully today. By the time the acquisition closes, a list update or a goods reclassification may have moved some of those transactions into specific-licence territory. Pre-closing sanctions due diligence should include a review of every general licence the target relies upon and an assessment of whether its conditions remain satisfied. For an assessment of your exposure under the SECO regime, contact Calder & Vance at info@caldervance.com.