Swiss Federal Supreme Court Confirms
PostFinance's Universal Service Duty
Despite Foreign Sanctions Designations
(4A_454/2025, 3 March 2026)

In a landmark decision published on 1 April 2026, the Swiss Federal Supreme Court confirmed that PostFinance (“PF”) must keep providing basic CHF payment services to a Russian national residing in Switzerland who is subject to US and UK economic sanctions, but not to Swiss sanctions. The Court held that neither the existence of foreign sanctions nor increased compliance costs justify an exception from PF's universal service obligation.

The case concerned a Russian national domiciled in Switzerland, sanctioned in the US and UK, but not in Switzerland. After PF had opened and then promptly closed the individual's account – citing his US and UK sanctions designations – the individual brought an action to compel PF to maintain the business relationship and continue providing domestic payment transaction services. The Commercial Court of the Canton of Bern upheld the claim and ordered PF to maintain the business relationship and continue providing limited domestic payment services. The Swiss Federal Supreme Court confirmed this decision upon appeal by PF.

Under the Post Act (“PA”), PF has a public law obligation to provide nationwide basic payment services set out in Art. 43 of the Post Ordinance (“PO”), in particular, domestic payment services in CHF for natural or legal persons with residence, registered office or branch in Switzerland. The scope of the universal service under Art. 43 para. 1bis PO does not include cross-border payment transactions with transfers in Swiss francs or in foreign currencies. According to Art. 45 PO, PF may deny or terminate basic payment services if (i) they conflict with national or international financial markets, AML or economic sanctions rules, (ii) compliance therewith could impose disproportionately high costs or (iii) if there is a risk of serious legal or reputational harm.

The Swiss Federal Supreme Court rejected each of PF's three arguments putting forward an exception under Art. 45 para. 1 PO: (i) no “conflict” with applicable legislation existed, as the national and international rules must be directly applicable in Switzerland, which is not the case for foreign economic sanctions that have no Swiss or UN equivalent; (ii) the “disproportionate costs” exception requires costs that materially exceed those incurred for comparable enhanced-risk client categories, not merely those of a retail client and (iii) the risk of serious legal and reputational harm from possible US secondary sanctions was not established with the requisite probability.

This decision confirms and clarifies the strict scope of PF's universal service obligation in payment transactions under public law. Foreign sanctions (such as US and UK sanctions) and general risk considerations do not, as such, justify terminating or refusing a business relationship under Art. 45 PO. Only a concrete, legally relevant conflict with Swiss or directly applicable international law, proven disproportionate costs in a specific case, or established serious legal and reputation harm can constitute a valid exception.

The Court's key findings can be summarised as follows:

No “Conflict” with Applicable Legislation (Art. 45 para. 1 lit. a, first indent, PO)
The Swiss Federal Supreme Court confirmed that the “national or international provisions” in the field of financial market, AML, or economic sanctions law referred to in the PO are those directly applicable in Switzerland.

In this regard, the Court held that:

• A “contradiction” within the meaning of Art. 45 para. 1 lit. a PO can only be understood as a legal prohibition on the business relationship (e.g listing under Swiss or UN sanctions). US sanctions designations alone are insufficient.
• While FINMA expects supervised institutions to manage legal risks arising from foreign laws as a matter of Swiss supervisory prudence, Swiss law does not impose a general duty to apply foreign sanctions directly.
• Enhanced compliance duties under Swiss AML or supervisory law – including classification as a “relationship with increased risks” – do not constitute a “contradiction”, as they require risk management measures, not the termination of the relationship.
• PF failed to demonstrate that the relationship constituted a “prohibited business relationship” under Arts. 7–8 of the FINMA Anti-Money Laundering Ordinance, as no sufficient evidence of money laundering or terrorism financing risks was established.
• No Swiss economic sanctions applied in the case at hand, rendering arguments based on the Embargo Act purely appellatory.

Legal Basis and Standard for “Disproportionate Costs” (Art. 45 para. 1 lit. a, second indent, PO)
For the first time, the Court confirmed that the “disproportionate costs” clause rests on a sufficient statutory delegation in Art. 32(2) PA which empowers PF to exclude certain services for security reasons or the protection of legitimate interests:

• Art. 32 para. 2 PA was adopted in response to Swiss Federal Supreme Court ruling 4A_417/2009 of 26 March 2010, which had confirmed a duty to contract in payment transactions and allowed derogations only with restraint.
• The Parliament deliberately chose a broad delegation framework in Art. 32 para. 2 PA to enable the Federal Council to define exceptions by ordinance.
• Art. 45 para. 1 lit. a, second indent, PO does not exceed this delegation.

On the merits, the Court held that:

• Costs are disproportionate within the meaning of Art. 45 para. 1 let. a, second indent, PO when they are no longer in a reasonable proportion to the objective pursued as compared with costs incurred for other clients.
• PF, as the party invoking an exception to its duty to contract, must concretely substantiate the costs of the specific relationship.
• PF asserted that its compliance units require on average four hours for opening an account in the context of a business relationship with enhanced risks and 5.43 hours for ongoing monitoring. However, adopting PF's interpretation (comparing costs to the standard, non-problematic client) is of limited relevance as such costs are not a meaningful benchmark.
• Higher compliance costs in case of enhanced business risks relationship (e.g., AML, financial market, or embargo checks) are expected and inherent in such business relationships. As a result, heightened due diligence, transaction monitoring and documentation obligations typical for such high‑risk categories under financial market and AML rules form part of PF's ordinary regulatory burden and cannot, as such, justify an exception on the grounds of disproportionate costs.
• PF's approach would categorically exclude entire categories of persons from its universal service obligation, which is incompatible with the constitutional mandate (Art. 92 para. 2 of the Swiss Constitution) and the statutory obligation to ensure a nationwide universal service in payment transaction services for all population groups (Art. 32 PA).
• “Disproportionate costs” must exceed those typically associated with comparable high‑risk categories, such as politically exposed persons (PEPs) or business relationships with enhanced risks.

No Serious Legal and Reputational Harm (Art. 45 para. 1 lit. b PO)
The Swiss Federal Supreme Court also upheld the lower court's finding that PF had failed to establish the requisite probability of serious legal and reputational harm:

In this regard, it held that:

• Abstract references to potential risks are insufficient; a serious and concrete threat is required.
• Legal harm may include financial losses or the loss of rights and privileges, while reputational harm involves damage to public standing.
• PF did not substantiate risks arising from US primary or secondary sanctions, particularly given the account’s intended use for domestic CHF living expenses.
• Moreover, alleged risks to correspondent banking relationships were unsubstantiated.
• No serious reputational harm was shown to be reasonably expected from the relationship.