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Why a sanctions freeze is a data problem before it is a legal one
A data provider's perspective on Swiss Federal Supreme Court judgment 4A_537/2025 of 28 April 2026 In brief — four things to know • The trigger is suspicion, not proof. A Swiss financial institution must freeze and report assets as soon as it has reasonable suspicion they are directly or indirectly controlled by a sanctioned person — and the freeze applies automatically, by law, without waiting for an official order. • The risk hides in the relationships, not the name. The client company and its beneficial owner were on no list; the exposure ran through extended family — the owner was the spouse of the sanctioned person's nephew. Plain name-against-list screening catches none of this. • “Family” is defined differently everywhere. EU and UK PEP rules use a narrow, closed list (spouse, children, parents); Switzerland's PEP rule is open-ended (“persons close for family, personal or business reasons”); and sanctions regimes turn on control, not kinship — with US measures reaching furthest through the “acting on behalf of” and 50% rules. • For data providers, it is a balancing act. The job is to map relationships richly enough to support any of these tests, while respecting data-protection limits and keeping false positives manageable — and to leave the final call on “how close is too close” to the client. Sanctions screening is often imagined as a clean, binary exercise: a name either matches an entry on a list, or it does not. The reality our clients deal with every day is far messier — and a recent judgment from the Swiss Federal Supreme Court is a useful reminder of just how subtle the line can be. Very often the hard question is not whether someone is listed, but how far a chain of family and ownership links has to run before the assets at the other end of it are caught by a freeze. This case sits squarely on that line.
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