Commodity Trading

Where the world's commodities are traded

Geneva, Zug and Lugano are home to trading houses that buy and sell oil, gas, metals, grains and softs from every continent, usually without the goods ever touching Swiss soil. The trade depends on finance, logistics and legal certainty, and it is exposed to the risks of the countries where the commodities are produced.

For a company from Asia, the Middle East or Africa, a Swiss trading entity offers access to banks that understand trade finance, to experienced inspection, shipping and insurance providers, and to a stable legal framework for contracts. In return, Swiss banks and counterparties expect transparent ownership, documented supply chains and a clear explanation of how each transaction is financed and hedged.

Compliance along the supply chain

Swiss criminal law punishes the bribery of foreign public officials, and a company can be held liable where its organisation failed to prevent the offence. Switzerland also applies its own sanctions under the Embargo Act, which in practice largely follow those adopted by the European Union. Traders therefore need screening procedures for counterparties, vessels and cargoes before a deal is concluded.

Large Swiss companies must report on environmental, social and human rights matters, and companies dealing in certain minerals and metals, or in goods where child labour is suspected, face additional due diligence duties under the Code of Obligations. For new market entrants, the practical questions are which of these obligations apply, how to document them, and how to show banks that they are met.

In this section

The articles explain what a trading house does, how the Swiss commodity sector is measured, how trading companies are structured, and which anti-money laundering, sanctions and anti-bribery rules apply. Several articles deal with trade with Africa, Central Asia and the Gulf.