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Swiss newspapers call the quiet city of Zug, in the Alps, “Little Moscow”, after the presence of many Russian offices and companies affiliated with the so-called oligarchs, the rich ruling elite in Russia, according to the Wall Street Journal.

The newspaper says that the local opposition party has started taking people on “oligarch tours” in the city, due to the large number of houses and companies of the rich Russians in it, adding that “Swiss media jokes about Zug say local leaders want ‘ Build a Kremlin in the city center. “

In February, Switzerland said it would join the European Union by imposing sanctions on the Russian oligarchs, but “it was not easy for the six local officials tasked with helping to implement the sanctions,” he said. Wall Street Journal.

Nord Stream office .. The company that operates Russian gas pipelines to Europe in Zug

The newspaper says the team struggled to identify the official local homes or businesses of any of the hundreds of wealthy Russians on the Swiss government’s list of sanctioned persons.

The team’s efforts are hampered on the one hand by the difficulties in identifying the names and owners of the offices, and “to understand the 300-page sanctions list”, Heinz Tanler, chief financial officer of the canton of Zug, told the newspaper said.

Tanler added that the team is also concerned about the implications for the local economy, and feels the sanctions have jeopardized Zug’s reputation as a safe haven for foreign investment.

“This is a very difficult time, especially for the canton of Zug,” he said.

In the end, officials found exactly one company out of about 30,000 companies registered on Zug that they believe is owned or controlled by a sanctioned individual.

slow action

Zug’s slow measures are a symbol of the country as a whole. Switzerland has promised to punish Russia for its invasion of Ukraine, but so far that promise has not led to much action against Russian companies doing business there, which has reinforced fears in world capitals that The Alpine Financial Center is not doing enough to Kremlin and allies of Russian President Vladimir Putin to frustrate.

Eighty percent of Russian goods are traded, according to the newspaper, by Switzerland, mostly by Zug and the city of Geneva.

Swiss banks are managing an estimated $ 150 billion for Russian customers, according to the country’s banking association.

Thirty-two of the oligarchs closest to Putin own property, bank accounts or companies in Switzerland, according to the Zurich-based transparency group Public Eye.

Russian billionaire Roman Abramovich is close to Putin

Russian billionaire Roman Abramovich, who is close to Putin, owns property in Zug

In the four months since the Swiss authorities began implementing the sanctions, $ 6.8 billion worth of Russian financial assets have been frozen, along with 15 homes and properties, according to the State Secretariat for Economic Affairs, or SECO, the implementing entity.

By contrast, EU countries have jointly frozen $ 14 billion in oligarch assets, including money, boats, helicopters and real estate, as well as more than $ 20 billion in Russian Central Bank reserves.

European Union countries also froze some $ 200 billion in financial transactions.

Authorities on the British Isles of Jersey alone have seized more than $ 7 billion worth of assets linked to Russian billionaire Roman Abramovich, who has not responded to the newspaper’s requests for comment.

US senators have submitted a special petition to Swiss officials to do more to track down Russian money and property.

The Swiss government has rejected this type of criticism, emphasizing that the adoption of European Union sanctions represents a historic shift and that it is doing everything in its power to blacklist the assets.

Western sanctions have been increasingly used to put pressure on Russia since 2014, when it annexed Crimea.

Since then, Putin and a close circle of allies have exploited loopholes in the global financial system to evade blacklists and hide wealth abroad.

Despite Switzerland’s status as a global financial center, limited resources hamper the country’s regulators, and company registration remains highly classified, making it difficult to determine ultimate ownership of assets, according to Western diplomats.

Swiss bankers and transparency activists say billions of dollars in Russian customers’ assets have been transferred to the names of their wives, husbands or children in recent years, a phenomenon that has accelerated in the run-up to the war, they say.

A history of secrecy

The newspaper says that many oligarchs have businesses in Zug that are still immune to the sanctions. Among them is Abramovich, the largest shareholder in Evraz PLC, a Russian steelmaker and mining company with a trading arm in the Swiss canton.

Evraz was sanctioned in the United Kingdom, but not in Switzerland or the European Union, although Abramovich is covered by the sanctions.

In Winterthur, not far from Zug, Sulzer AG is headquartered, an engineering firm owned 48.8 percent by Russian billionaire Viktor Vekselberg, which is under U.S. and British sanctions.

When Poland imposed sanctions on Sulzer’s operations, the Swiss embassy in Warsaw unsuccessfully pleaded with the Polish government to reverse the move, a Polish government official and the Swiss Ministry of Foreign Affairs told the newspaper.

Sulzer said Poland’s decision was wrong, as Vekselberg is merely a shareholder in the company, not one of its owners or controlling its operations.

US and European officials say they are counting on the Swiss government to find and freeze businesses and homes in Switzerland that belong to Russia’s approved oligarchy, but Switzerland’s history of financial secrecy, enshrined in its law, could make it very difficult. to determine “who owns what”.

Swiss business records do not require companies to list the names of their true owners, which are often hidden by companies in Switzerland that hold trust funds in financial havens, a loophole exploited by businessmen from Russia and elsewhere to gain true ownership of them. conceal. assets, according to the newspaper Swiss politicians opposition and supporters of financial reform.

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