By Brenna Hughes Neghaiwi
ZURICH (Reuters) -Swiss private bank Julius Baer will end all business with clients based in Russia, it told them in a letter seen by Reuters on Tuesday, as wealth managers navigate a widening net of sanctions and restrictions related to Moscow’s invasion of Ukraine.
Julius Baer will cease business with clients domiciled in Russia by no later than Dec. 31, the letter said, while wealth management activities such as mandates managing clients’ investments, credit agreements and credit card contracts, would be terminated by the end of September.
Julius Baer declined to comment.
The move comes as Swiss banks, hubs for offshore wealth, have entered the crosshairs of authorities, who have been using sanctions, asset freezes and criminal probes to pressure Russia’s wealthy elite and reduce support for President Vladimir Putin.
In March, Bloomberg reported that Switzerland’s two biggest banks at the time — Credit Suisse and UBS –were under scrutiny in a U.S. Department of Justice (DOJ) probe into whether financial professionals helped Russian oligarchs evade sanctions.
Credit Suisse has since been taken over by UBS, making Julius Baer the second-largest of Switzerland’s listed lenders.
In a deviation from its traditional neutrality, Switzerland moved in March 2022 to adopt sanctions that the European Union (EU) imposed on Russian people and companies and freeze their assets to punish the invasion of Ukraine.
It has since continued to widen sanctions in line with EU moves.
As of Nov. 25 2022, Switzerland had frozen some 7.5 billion Swiss francs ($8.63 billion) in related financial assets, the agency overseeing sanctions said in December, compared to some 46.1 billion francs in existing deposits held by Russian nationals and Russian-domiciled persons.
In March 2022 Julius Baer said it was halting any new business with wealthy Russians, as European lenders worked to limit their exposure to Russia’s elite.
Forbes Russia in May reported that Julius Baer had told Russian and Belarusian clients that their investment accounts would be frozen due to requirements from clearing house Euroclear.
($1 = 0.8691 Swiss francs)
(Reporting by Brenna Hughes Neghaiwi, editing by John Revill and Susan Fenton)
