Why export and sanctions matter for SMEs too
An SME selling machinery, components, software, or services abroad faces more than logistics and invoicing: every contract may intersect restrictive measures of the Confederation or third countries with extraterritorial effect. In Switzerland the central framework is the Federal Act on the Implementation of International Sanctions (Embargo Act, EmbA) and ordinances of the Federal Council, administered and published by SECO (State Secretariat for Economic Affairs).
Violations are not reserved for large industrial groups. A single order to a buyer listed on a sanctions list, a payment through a sanctioned bank, or re-export to an embargoed country is enough for the company — and personally those who manage it — to face criminal penalties, asset freezes, and reputational damage. Risk increases when the customer base is fragmented, payments pass through multiple jurisdictions, and due diligence remains informal.
This guide translates obligations into manageable practices for organizations with few staff: when to screen, what to archive in accounting and commercial management, and how the board of directors or managers can demonstrate that they have organized reasonable controls.
Swiss legal framework in brief
Swiss embargoes implement UN Security Council sanctions (mandatory for Switzerland) and, case by case, measures adopted by the EU or autonomous measures. For exporting SMEs, the following matter most:
EmbA and ordinances — Prohibit supplies, services, and sometimes payments to designated persons, entities, and territories. Updated lists and FAQs are on the SECO website; they should be treated as the primary source before every sensitive new business relationship.
Goods Control Act (GCA) — For dual-use or military goods, licensing and controls add to embargoes. A technology or mechanical SME must verify whether its catalogue falls within annexes to the Goods Control Ordinance (GCO) or « catch-all » provisions.
Criminal liability of legal entities (Art. 102 SCC) — If an offence is committed in the course of business due to inadequate organization, the company may be fined; governing bodies are personally liable if they breached supervisory duties under the Code of Obligations.
| Element | What it means for the SME |
|---|---|
| SECO lists (persons / entities) | Systematic verification of counterparties against SECO lists (customers, consignees, beneficiary banks, logistics partners, and where relevant beneficial owners) before every sensitive relationship |
| Territorial embargoes | Export bans or restrictions for countries or regions; verify final destination and declared end-use of goods |
| Sensitive sectors (e.g. oil, dual-use) | Enhanced controls, often SECO licence; involve the export control contact (GCA) before binding offer |
| Foreign sanctions (EU, USA) | Not directly applied in Switzerland, but relevant if the counterparty or banking chain is subject to blocks; risk of payment impossibility or contractual dispute |
| Reporting obligation | Mandatory notifications to SECO when directly affected by a measure (e.g. asset freeze); duty to cooperate with supervisory authorities (Art. 3 EmbA). Enforcement of violations is in principle the responsibility of SECO |
Customer and partner screening: minimum process
A programme « right-sized for an SME » does not require a dedicated compliance department, but must be repeatable, dated, and linked to commercial and accounting documents.
Before the order
Collect legal name, registered address, UID/IDE, billing country, and final delivery country. Compare against SECO lists — the SECO tool covers directly designated subjects, not ownership or control relationships — and, if risk justifies it, commercial databases (sanctions, PEP, adverse media).
Document outcome as « clear », « hit to clarify », or « reject » with operator name and timestamp. A hit does not automatically block: human assessment is required and, when in doubt, legal advice.
During the relationship
Re-run screening at defined intervals (e.g. annual for recurring customers, immediate if beneficial owner, bank, or destination changes). Align control date with contract renewal or opening of a new credit line.
Monitor SECO updates: subscribe to notifications or integrate feeds into your ERP. A « long-standing » customer can become designated overnight.
Supply chain and agents
Agents, distributors, and freight forwarders often act on behalf of the exporter. Include embargo compliance clauses, audit rights, and obligation to report destination changes in contracts.
For subcontractors incorporating Swiss components, request declaration of final destination and end-use — useful in case of inspection.
Payments and banks
Screen wire beneficiaries and intermediary institutions too. Swiss banks apply their own filters; a rejected payment does not exempt you from pre-contractual verification.
In accounting, note screening references on the partner account or order notes field, to reconstruct the trail in internal audit.
Risk signals to formalize
Integrate these indicators into an internal checklist approved by management; they reduce « we didn't know » risk without weighing down every domestic sale.
- Request to invoice in one country and deliver to another without a plausible reason
- Refusal to identify the end user of components or software
- Orders split below thresholds that usually do not require a licence
- Payments from third parties not linked to the contract
- Delivery addresses in port areas or free zones with undocumented re-export
- Recently registered counterparty with minimal capital and unusually large order
When a signal appears, the workflow must provide escalation to the export lead (or manager) and suspension of shipment until documented clarification — not just an email note lost in the sales inbox.
Internal documentation and accounting trail
Compliance is proven on paper (or electronic equivalent). Linking export and accounting reduces duplication and facilitates legal or tax review.
| Document | Minimum content | Indicative retention |
|---|---|---|
| Embargo policy | Scope, roles, screening frequency, hit handling, reporting channel | Versions signed by board / management; change history |
| Control register | Partner, date, lists consulted, outcome, operator | Duration of relationship + 5–10 years (align with EmbA criminal limitation and GCA requirements) |
| Export order dossier | Contract, destination declaration, licence if applicable, proof of shipment | Linked to invoice and revenue posting in ERP |
| Corporate body minutes | Policy approval, delegations, incidents and corrective measures | Corporate records / board minutes |
In accounting software such as Accountex, maintaining customer/supplier master data with country, UID, and compliance notes fields allows every sales or purchase invoice to be linked to the screening dossier. The goal is not to automate legal judgments, but to ensure no critical accounting entry lacks reference to the control performed.
Directors' and managers' liability
In a joint-stock company (AG), the board of directors sets strategy and supervises execution (Art. 716 CO); in a limited liability company (GmbH), managers have analogous duties (Art. 812 et seq. CO). For sensitive exports this translates into: approving a written policy, appointing an internal lead (possibly combined with other roles), ensuring periodic training for commercial staff, and verifying process effectiveness at least annually.
The diligence required is that of a reasonably prudent businessperson in the sector, not that of a global bank. However, ignoring public lists, failing to react to obvious signals, or not documenting decisions can qualify conduct as negligent in criminal proceedings or civil liability towards the company.
The auditor (if any) may request evidence of controls on samples of export transactions; having the register and policy ready avoids delays at year-end close and strengthens trust from banks and investors.
Recommended eight-step workflow
- Classify the portfolio — Separate CH/EU-only customers from export to high-risk countries or sectors.
- Adopt policy and delegations — Corporate body resolution and communication to the team.
- Integrate screening in CRM/ERP — Mandatory gate before order confirmation or pro forma invoice.
- Verify GCA where applicable — Before commercial commitment on controlled products.
- Archive evidence — PDF lists, dated screenshots or provider reports, linked to the partner.
- Review periodically — Annual calendar + triggers on SECO list changes.
- Manage incidents — Stop shipment, legal counsel, assessment of contact with SECO.
- Report to management — Annual summary: number of checks, hits, rejected orders, training updates.
Practical tools and resources
SMEs can combine free manual checks and scalable paid solutions:
SECO lists
Periodic consultation and download; suitable for low volumes with manual register.
Commercial databases
Batch screening, ongoing monitoring, audit trail — useful beyond 50–100 international counterparties.
Specialist advice
For first contracts in embargoed markets, dual-use, or complex payment structures.
Bringing together export, control, and the numbers
Embargoes are not a legal department appendix far from accounting: every export invoice is a point where destination, price, and counterparty must align with checks performed. Aligned documentation and records protect margins (avoiding seizures, penalties, and loss of licences) and demonstrate solid governance to banks and authorities.
An exporting SME that invests once in policy, clear responsibilities, and a digital trail in commercial and accounting processes turns a federal obligation into a competitive advantage: serious customers prefer suppliers who do not introduce risk into their value chain.