Switzerland may not have oil, but it has better: it has commodity trading companies. With the war in Ukraine and soaring prices, they made record profits last year. More profits mean more taxes. Result: the canton of Geneva has never earned so much money since Russia invaded Ukraine. An unexpected windfall, and almost embarrassing.
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A surplus of 1.3 billion Swiss francs
Also, by presenting the 2022 accounts of the canton, the Minister of Finance of Geneva, Nathalie Fontanet, knew she was expected at the turn. Indeed, Geneva recorded a record surplus of 1.3 billion Swiss francs – 727 million in the end, after repayment of part of its debt. However, there is no question of saying that Geneva benefits from the war: “All of the companies we have at home are companies that have complied with the sanctions, provides the latter. So it’s a bit simple for me to say that we took advantage of it. We have an economic fabric whose activity has not been disrupted in the context of the various crises that we have gone through.
Same speech from trading and shipping companies. Florence Schurch leads the STSA, the association that brings them together: “It is true that this volatility came because of the sanctions, concedes the latter. But we must not forget that all these people and all these companies pay taxes which are redistributed to the population. Me, I think that in France, you are always very happy when companies make a profit. It’s always better than loss-making companies laying people off, isn’t it?
Record profits that challenge
The insolent economic health of Geneva nevertheless calls into question when we see the record profits of the more than 300 trading companies established on the shores of Lake Geneva.
Trafigura, the world’s second largest oil merchant made more profit in 2022 than in the previous four years. Gunvor, the main trader of liquefied natural gas, has made more sales in one half than during the whole of 2021. And we could pile up the examples. The problem is that all of this is done in great opacity, so it is not always clear whether companies are complying with the sanctions regime against Russia.
The NGO Public Eye has been calling since the start of the conflict for Switzerland to set up a supervisory authority for the commodity trading sector. And introduces a tax on windfall profits from the crisis.