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Swiss banks Why Venezuelan money is no longer welcome in Switzerland

Banco suizo

Credit Suisse has stopped doing business with Venezuela

(Keystone)

Swiss banks have joined the US sanctions against Venezuela, meaning the South American country’s diplomatic missions in Bern and Geneva are running out of funds to do their work and pay their staff. 

“We’re in a situation of financial impotence,” complains César Méndez, the Venezuelan ambassador in Bern. The embassy’s bank accounts at Credit Suisse were suddenly closed, he says. Since then, no money can be sent from Caracas to Bern. 

A Credit Suisse spokesman says the bank won’t comment on “possible business relations”. 

Méndez has also contacted other banks, including PostFinance, but none would open an account for him. 

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“We met the Swiss authorities, some of whom reacted with surprise and even embarrassment,” he tells swissinfo.ch. “But we were then told that they couldn’t get involved because it was a private matter between a bank and its clients.” 

However, according to Article 25 of the Vienna Convention on Diplomatic Relationsexternal link, “the receiving State shall accord full facilities for the performance of the functions of the mission”. 

Official position 

So is Switzerland obliged to help? During the current parliamentary session Fabian Molina from the leftwing Social Democratic Party raised this issue with Swiss Foreign Minister Ignazio Cassis, asking what the government was doing about this and whether the current legal basis was sufficient. 

In his responseexternal link on Monday, Cassis said the Vienna Convention was “aimed at the contracting states and did not regulate relations between private individuals. The business relationship between Swiss banks and their clients is subject to civil law, even when a foreign representation is a contracting party”. 

He added: “The legal basis does not allow us to override the laws of other states. That’s the international situation.” 

However, Cassis explained that “in concrete cases, when necessary, the foreign ministry supports the representation concerned in the search for solutions so it can carry out its official activities in accordance with the Vienna Convention”. 

Can’t pay the rent 

The closure of the bank accounts of Venezuelan diplomatic missions in Switzerland falls within the scope of the sanctions imposed by the United States, which also affect Cuba and other countries. 

“Swiss banks fear the fines that the United States could impose. They are actually stricter in applying sanctions than banks in other European countries,” Méndez says. 

According to a report in the Neue Zürcher Zeitungexternal link newspaper, the embassy can no longer pay the rent for the residence in Bern. Embassy staff in particular are suffering. They are no longer able to make ends meet, whether it’s paying the rent or medical bills or even buying food.

US embargo

A tightening of the US economic embargo forces Swiss banks to stop transactions with Cuba and Venezuela. Although Swiss banks are not directly subject to US law, they risk exclusion from the US payment market. 

Since 2017, the United States has imposed increasingly severe sanctions on Venezuela, targeting the autocratic president, Nicolas Maduro. However, the US does not see him as a legitimate head of state.

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Translated from German by Thomas Stephens, swissinfo.ch

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