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The Novelty of Swiss Sanctions Is Oversold

Switzerland has imposed economic sanctions before, and over the past generation it has quietly embraced collective security.

A Swiss flag flies behind Russian and American flags in Geneva
Sean Gallup/Getty Images
A Swiss flag flies behind Russian and American flags in Geneva, prior to a meeting between Joe Biden and Vladimir Putin on June 15.

When Switzerland in late February signed on to European Union sanctions against Russia, the American press reported it as an unprecedented departure from five centuries’ strict neutrality. “Setting aside a deeply rooted tradition of neutrality,” was how The New York Times described it. Reuters called it “a sharp deviation,” and The Washington Post called it “a sharp break.”

It wasn’t that sharp. Switzerland has imposed economic sanctions before. A partial list of countries the Swiss targeted previously would include Iraq, Iran, North Korea, Zimbabwe, and Myanmar. Last month wasn’t even the first time Switzerland slapped economic sanctions on Russia for invading Ukraine. In 2014, Switzerland imposed multiple rounds of sanctions after Vladimir Putin annexed Crimea (though these were limited to barring new business to bypass sanctions imposed by the European Union).

Economic sanctions account for most but not all Swiss departures from neutrality. The Swiss Army has been dispatched here and there in recent years, albeit in tiny numbers. The U.S.-led invasion of Afghanistan following 9/11 included 31 Swiss soldiers; in what the Swiss Broadcasting Corporation billed as the nation’s “first military deployment since 1815,” the Swiss troops remained in Afghanistan from 2001 to 2008. Even before that, wee Swiss platoons and squads participated in international peacekeeping efforts in Bosnia and Herzegovina in the late 1990s and in Korea’s demilitarized zone as early as 1953.

Switzerland was never quite so neutral as its reputation, and since the Cold War’s end, the imperatives of globalization, European integration, and collective security have chipped away further at Swiss neutrality. Neutrality remains a hugely popular ideal among Swiss voters, but the reality is more complex.

Neutrality in any country is typically a function largely of geography. Switzerland became neutral well before it was an independent state, initially because of its proximity to France and later because it was situated between Germany and France. The Swiss Confederacy was a militarily powerful collection of cantons within the Holy Roman Empire when its armies were defeated badly by the French in the Battle of Marignano in 1515. “I have vanquished those whom only Caesar vanquished,” King Francis I is said to have boasted. Humiliated by the defeat, the Swiss signed a treaty with France pledging to settle future disputes by arbitration. They managed to avoid military conflicts until Napoleon’s troops marched through in 1798. Switzerland’s neutrality was then formalized by the Congress of Vienna in 1815.

The country remained neutral through two world wars partly because of its mountainous topography, partly because it was better armed than Belgium to defend its sovereignty, and partly through sheer dumb luck. During World War II, Switzerland maintained trade, including trade in arms, with both the Allies and Germany, with the curious consequence that the Swiss used German weapons to defend themselves from German invasion. The world wars were also when Swiss banking became globally dominant. Switzerland accepted gold from all sides, regardless, in the case of Germany, of whether that gold had been confiscated from Jews, about which the Swiss showed little curiosity. One clear violation of the principle of neutrality was Switzerland’s refusal to admit more than a few hundred Jewish refugees. The Swiss did admit Jewish money for deposit, however, the indifferent disposition of which after the war became an international scandal in the late twentieth century and resulted in a $1.25 billion settlement with Holocaust victims and their heirs.

Switzerland remained neutral after World War II, refusing to join the United Nations because (unlike the League of Nations, which was headquartered in Geneva) the U.N. was by design non-neutral, authorizing in its charter military deployments to nations under attack. As late as 1986, 75 percent of the country voted against joining the U.N.

Even so, Switzerland was drawn as a nonmember into a voluntary and highly circumscribed peacekeeping role. With the end of the Cold War, there was no twilight struggle to remain neutral from, and in 2002 Switzerland finally joined the U.N. Twenty years later, it’s campaigning for a nonpermanent seat on the Security Council. And while Switzerland remains outside the EU, economic survival has compelled it to collaborate with the EU in various ways, much as it did with the U.N. during the Cold War. Even the secrecy of Swiss bank accounts has greatly diminished—in the wake of public revelations that Swiss banks were a mechanism for massive tax avoidance by U.S. citizens—with the establishment of new transparency mechanisms. (That’s the good news. That bad news is that South Dakota picked up much of this business.) Neutrality remains hugely important to the Swiss as a national policy, with 95 percent of the country supporting it in a 2018 referendum. But it’s receding as a practical daily reality.

The Swiss themselves are debating how much of a change its latest sanctions against Russia represent, as Stefanie Walter, a political scientist at the University of Zurich, explained to me by email. On the one hand, these are the first “major sanctions” Switzerland has imposed “that are not U.N.-based.” Their breadth and the speed with which they were imposed are new, Walter said. Swiss journalist Markus Häfliger, a political correspondent for the German-language newspaper Tages-Anzeiger, calls it an “unprecedented escalation.”

On the other hand, Switzerland has imposed sanctions before, some in connection with the U.N. that Switzerland is now obliged as a member to impose, and some in connection with the EU that are purely voluntary on Switzerland’s part. (For a complete list of nations and terror organizations currently under Swiss sanctions, click here.) “Neutrality … was never a concept with entirely clear-cut elements carved in stone,” Oliver Diggelmann, a professor of law at the University of Zurich, told the Swiss news site The Local, but “rather an instrument which needs being adjusted from time to time to new circumstances.”

The circumstances aren’t just external. Despite the Swiss electorate’s deep commitment to neutrality in principle, the imposition of economic sanctions concerning the Ukraine invasion is very popular politically, “with all but one major political party calling on the government to impose sanctions,” Walter pointed out, “and major demonstrations in the street asking the government to do the same.”

There will be a cost to Switzerland’s economy, but not so great as one might guess. Granted, Switzerland is “the most popular investment destination for wealthy Russians,” Walter noted, with about one-third of all Russian wealth that resides abroad invested there. About 80 percent of Russian raw materials are traded in Switzerland. But that’s looking at it from Russia’s point of view. From the Swiss perspective, Russia is only its twenty-third-biggest trading partner. For the Swiss, the price of sanctioning Russia just isn’t that high. For Russia, it’s yet another humiliating illustration of how easy it is to turn off the spigot.