Sanctions are coercive measures against states, organisations and individuals. In Switzerland they are based on the Embargo Act and the Federal Council ordinances issued under it; the State Secretariat for Economic Affairs (SECO) lists the persons and organisations concerned in its sanctions database. Anyone managing wealth or administering structures must ensure they do not make funds available to sanctioned persons.
Which lists matter
For Swiss financial intermediaries the SECO lists are binding. Switzerland adopts many EU sanctions, for example in connection with Russia, but not automatically and not always at the same time. UN sanctions also play a role, and as soon as US dollars or a US nexus are involved, so do the lists of the US OFAC — not because they apply directly in Switzerland, but because banks and counterparties apply them.
When to screen
At onboarding, for the contracting party and all beneficial owners, attorneys and governing bodies. Whenever the lists are updated, against the entire book, because someone clean yesterday may be listed today. And for transactions, covering counterparties and beneficiaries. The second point is often overlooked in small organisations: a one-off screening at onboarding is not sanctions screening but a snapshot.
Why exact matching fails
Names are transliterated differently, first names abbreviated, companies renamed. Matching only exact strings misses the relevant cases. Fuzzy matching finds them but produces false positives. The answer is not a sharper algorithm but a process: hits are checked against additional attributes such as date of birth, nationality or registration number, and the decision is recorded with its reasoning.
What happens on a true match
If a match is confirmed, the obligations of the relevant ordinance apply, typically freezing the assets and reporting to SECO. In parallel, it must be assessed whether there is a suspicion under the Anti-Money Laundering Act requiring a suspicious activity report. These procedures should be written down in advance; in an emergency there is no time to invent them.
Screening as a set
Sanctions screening rarely stands alone. It is performed together with checks for politically exposed persons and adverse media screening. The three checks answer different questions but should converge in one documented result per person. How deep to go is set by the risk-based approach.