Russian Energy: Hide and Seek

Radio Télévision Suisse | 12min
Postproduction script

00:00:02,680 VO: -Zug, 30,000 inhabitants and 30,000 companies, attracted by a tax haven deep inside Switzerland. Many of these companies are simply mailboxes; that make the postman's job a complicated task. But behind these office buildings is the trading of raw materials, including Russian coal. According to the NGO Public Eye, 75% of of Russian coal exports, mined more than 5,000 km from Zug, are traded in Switzerland. This occurs mostly from this street: Baarerstrasse where the largest Russian mining groups have installed their commercial branches, more or less discreetly. At the end of August, the trading of Russian coal will be banned in Switzerland due to the strength of the relations of these traders with the Kremlin.

1’07 Russian Energy: Hide and Seek

00:01:15,090 VO: On Sunday April 3, the world was horrified by the Bucha massacre. The bodies of dozens of civilians, shot by the Russian soldiers. The reaction of the European Union came two days later.

00:01:28,200 EU official: We will impose an import ban on coal from Russia, worth 4 billion euros per year.

00:01:37,244 VO: -One week later, the Federal Council followed up with the European sanctions. In Lausanne, in the offices of Public Eye, Adrià Budry Carbo started his investigation. It took a lot of work to identify the companies most affected.

00:02:03,675 Adrià: -There is no register of the owners of the companies. The commercial registers give very little information, there is an omerta, a culture of silence that reigns among the commodity raw materials sector. Switzerland is at the centre of Putin's coal hub. Everything is managed from Switzerland, these companies have their commercial branch in Zug or its surroundings and it is from there that the coal is bought and sold to most European countries. These companies have one thing in common: they are managed by captains of industry, oligarchs connected in one way or another with the Kremlin. These companies are giants in this sector.

2’20 Adrià Budry Carbo, Public Eye survey

00:02:46,860 VO: -The biggest of them, Suek, is located at Baarestrasse 37. It produces and exports more than half of the Russian coal and shares its premises with EuroChem, a fertilizer giant. Not so long ago, they belonged to this man. Andreï Melnitchenko, a Russian wealthy man living in St-Moritz. We know him well. A few months earlier. We reported on this man who denies being close to the Kremlin while he was one of the oligarchs summoned by Putin on the first day of the invasion of Ukraine. We told how he had escaped the European sanctions, Switzerland having waited 7 days to add his name to the black list. With the blessing of the State Secretariat for Economic Affairs (SECO) he gave the shares of his companies to his wife, Aleksandra, whom Bern has just put under sanction.

3’10 Mise au Point – 27^th March 2022

00:03:43,200 VO: In Zug today, Suek's headquarters seem to be running in slow motion. Nobody is at the reception. One block away, the department of the canton's finances. The boss here is Heinz Tännler, strongman of the Zug government. 75% of the Russian coal trade; that figure does not surprise him.

00:04:14,440 Heinz: -It is certain that much of coal trading is done here. This is not a surprise. As for the coal embargo, I can't tell you the impact on Zug as an economic location. Some traders who trade in coal have probably left the township to settle elsewhere, but we did not study this in detail.

4’22 Heinz Tännler, State councillor, Zug UDC

00:04:38,153 Reporter: -What do you think about the sanctions against Russia?

00:04:41,563 Heinz: -These sanctions have been decreed by the Confederation. We have implemented them and we will keep on implementing them. I don't think it's wrong, but we should create more transparency. With legal entities, there are many optimized constellations which are not easy to check. There should be more transparency in this area.

00:05:11,575 VO: -Since the beginning of the war in Ukraine, it has become more and more opaque.

00:05:17,150 Adrià: -On the commercial register, there is a scramble. From February-March, many administrators of Russian nationality have lost their right to sign. Swiss directors are appointed fast. There is an industry of lawyers and trustees willing to take over these positions and manage these companies.

5’24 Adrià Budry Carbo, Public Eye survey

00:05:46,579 VO: -For the cantons, it will be up to SECO to ensure the ban on brokerage operations of Russian coal are followed up. The telephone rings constantly. They have to answer to all the questions.

00:06:04,590 SECO employee: -If it's about the Swiss sanctions, you are at the right address.

00:06:12,908 VO: -SECO is under fire. It's unfair criticism according to this official.

00:06:19,645 Erwin: -When I look at my employees who do their job with passion, and who work a lot because they want to be efficient and get results, it's not justified.

6’22 Erwin Bollinger, Head of Bilateral Economic Relations, SECO

00:06:37,290 VO: -Another criticism: the lack of means in the face of the magnitude of the task.

00:06:43,685 Erwin: -We can take on our tasks because we have the resources. We have asked for them. We have about twenty people. We would like to work less but for now, it's enough.

00:07:01,435 VO: -Bern, this Thursday morning. Sanctions are the subject of an extraordinary session requested by the left wing of the National Council. The subject: the creation of a task force to support SECO.

00:07:15,627 Council speaker: -It is necessary in a field where financial arrangements are complex.

00:07:21,783 VO: -And the setting up of a supervisory authority.

00:07:27,575 Council speaker 2: -Most of the time, we don't know the owners of commodity traders not listed on the stock exchange.

00:07:35,826 VO: -Adria Budry Carbo has been following the debates, his survey under his arm. In Parliament, the lines are moving. Since the beginning of the war, Gerhard Pfister goes to the front. No one expected him here.

00:07:57,638 Reporter: -Does SECO have the means to do the job?

00:08:01,063 Gerhard: -It's not a question of means, more of attitude. SECO needs to change its attitude. We have companies that may be able to help finance the war in Ukraine. It's our responsibility to see what we can do.

8’04 Gerhard Pfister, National councillor, Le Centre ZG

00:08:24,450 Reporter: -The problem is the opacity. Do we need to do something, in your opinion?

00:08:31,775 Gerhard: -If we can't fight the financing of the war in any other way, if you have to change the law, then it should be done.

00:08:44,356 VO: -The right wing does not slam the door on this idea.

00:08:49,005 Reporter: -Some call for more transparency to know who the economic beneficiaries are.

00:08:55,874 Christian: -I follow them to the extent where right now everyone wants everything to be transparent. But a limited company is well named. They allow you to carry out these activities. If there is a suspicion that a group is owned by shareholders under sanctions, one may ask oneself whether to intervene.

9’00 Christian Lüscher, National councillor, PLR GE

00:09:21,919 VO: -The motion does not pass.

00:09:28,445 Adrià: -We are often in the camp of the losers. The interests of the business community take precedence.

9’33 Adrià Budry Carbo, Public Eye survey

00:09:38,037 VO: -That day, Adria leaves the Federal Palace with a consolation. The green light from the lower house to the Federal Council to issue embargoes in a more autonomous way. The implementation of the embargo on Russian coal will be a test. The one on oil, taken over by Bern, will be a different story. According to a Finnish research institute which evaluates the financing of the war in Ukraine, the European Union has bought coal from Russia for more than one and a half billion euros. 32 billion for Russian oil alone. All eyes are on Geneva and its International oil trading platform. Between 50 and 80% of Russian oil is traded through Geneva-based trading companies. We requested an appointment in the offices of the Swiss Commodity Trading Association of raw materials to measure the impact of sanctions. The spokesperson of the branch answered us.

00:11:00,259 Florence: -A trading company has offices abroad. It's easy to ask employees to go and work in another country. There are traders who could move to countries where the banks are financing the trade with Russia and where they keep their business going.

11’05 Florence Schurch, Swiss Commodity Trading Association

00:11:27,458 Reporter: -Some of them have already done that? Florence: -Absolutely.

00:11:30,399 Reporter: -Do you estimate the number?

00:11:32,464 Florence: -This is very difficult. The companies don't shout it from the rooftops, and it's tricky to get a handle on the number of jobs.

00:11:47,976 VO: -The banks did not wait for the sanctions. They have become very reluctant in financing operations dealing with Russian oil and coal trading. That's perhaps more efficient than SECO.

12’06 Credits:

Pierre Bavaud
Jérôme Galichet
Pierre Habran
Patrick Blache
Briag Bouquot
Benedetto Garro
Bronwen Cowley
Gabriela Ackermann
Elias Siddiqui