Swiss banks reportedly warning clients their accounts will be closed if they pay taxes to Russia

Swiss banks have begun warning Russian customers that their accounts will be closed if they continue paying taxes to Russia, the outlet RBC reported on Thursday, citing two Swiss lawyers who work with Russian clients and a source from the country’s banking sector.

According to the Swiss lawyers some of their clients have already had their accounts blocked after they paid taxes in Russia. A source from the banking sector that the bank UBS may have sent letters warning of the same issue to some of its clients.

Swiss private bank Julius Baer (BAER.S) 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.

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.