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War in Ukraine – Generosity hampered by the reluctance of Swiss banks

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A Ukrainian-born entrepreneur has great difficulty opening a bank account to raise funds.

Despite several requests to open an account, it was difficult for Constantin and Karyna to find a bank through which to raise funds.

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Swiss of Ukrainian origin, Constantin and Karyna, his Ukrainian wife, have been busy since the beginning of the Russian invasion in order to come to the aid of their compatriots as simply as possible. Their idea: “First, send equipment, then raise funds to be able to buy more and, secondly, help rebuild the country.” But lo and behold, sometimes the simplest ideas turn out to be the most complicated to implement, as they have learned the hard way.

Professionally active between Ukraine and Switzerland, Constantin knows the Slavic country with which he trades well. He turned to his Geneva company’s bank to open an account to collect the money. “My request was initially accepted, before being told that it was not possible”, he says. Argument of the establishment: the origin of the funds must be able to be established. “I address myself to well-established families in Switzerland or to companies. Everything is transparent”, exclaims Constantin. However, nothing to do. He was unable to open an account in his own name.

Discrimination?

On the advice of friends, an association is created. But here again, it is difficult to convince the various banking establishments approached. “I think there is discrimination. Because of the ongoing conflict, the banks fear sanctions in the event of an error, ”says the boss, who has still not succeeded in concretizing the fundraising project on which they have been working for two weeks.

The economic sanctions against Russia adopted by Switzerland at the beginning of March also restrict certain trade with Ukraine. In particular, it is forbidden to export war material or material which could have a military purpose. “Banks are free to take measures that go beyond the minimum legal requirements for reasons of risk and reputation,” says the State Secretariat for the Economy. On the side of the Cantonal Bank of Geneva, it is indicated to welcome this type of request in a neutral manner. “We apply the regulatory requirements, as well as the normative framework in force without discrimination. The guarantees requested are the usual ones, set by law.

Go to well-established NGOs

The situation in Ukraine nevertheless makes institutions cautious. “Banks are subject to very strict rules in terms of compliance, inform two sources from the banking community. They must ensure the identification of the beneficial owner, the origin of the provenance of the funds or even control the transfer of funds or equipment to a country at war, etc. All this makes these operations very complicated.” They therefore advise going through well-established NGOs to help Ukrainians. Constantin and Karyna finally found an attentive ear with a small Geneva private bank which validated the opening of an account.

Creating an association does not by far offer the guarantee of being able to open a bank account easily. According to the umbrella organizations, the difficulties do exist. “We found that most banks are not interested in opening accounts for associations,” confirms Antonin Calderon. Member of the coordination of Après, the Geneva network of social and solidarity economy, he specifies that if the establishments are sometimes very straddling the required documents, such as statutes, minutes or signatories, the opening times can then be very long. Another brake, a lack of knowledge of the associative environment which leads to misunderstandings and generates difficulties. François Turk, from Bénévolat Vaud, confirms: “Associations sometimes do not fit into the boxes.” But, depending on the banks, the sensitivities are different. Thus, the Banque cantonale de Genève indicates that its “aim is to contribute to the economic development of the canton and its region within the framework of a public service mission. Service to associations is an integral part of the services it is able to offer to its customers.”

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