Restrictions need to be tightened to prevent grain from Russian-occupied Ukraine entering the global market via Swiss-based commodity traders, according to an advocacy group.

Marketing pillaged commodities is a war crime under international law, according to report from Public Eye, which said grain from occupied regions is being covertly sold on world markets. It’s being shipped through ports in both Russia and occupied Ukraine, and sanctions imposed by Switzerland — the hub for global grain trading — do little to inhibit those flows, according to the NGO.

“Swiss sanctions provisions against Russia, which are in line with the EU, currently do not provide any means to combat the trade in plundered commodities from Ukraine,” Public Eye said. “To take account of the geopolitical significance of the Swiss trading hub, the Ukraine ordinance should be expanded to include transit trade.”

The Public Eye study comes after a Swiss newspaper reported in January that Vivalon AG, a Zug-based grain trader, bought a cargo late last year that appeared to be from occupied Ukraine.

A lawyer representing Vivalon shared an internal report the company produced on the matter. The grain trader has halted all business with the companies involved in the deal and is strengthening its compliance procedures, the lawyer said in an emailed statement. Vivalon declined to comment further.

The internal report cites an “oversight” in a transaction potentially involving grain from occupied Ukraine. In particular, the firm’s compliance measures failed to discover that the vessel carrying the grain — the San Cosmas — was subject to international sanctions under its previous name and owner. The ship, which recently changed ownership, didn’t appear on a sanctions list of the US Office of Foreign Assets Control, but checking its historical links may have prevented the purchase, according to the internal report. 

“This gap exposed Vivalon AG to potential legal and reputational risks and therefore underscores the necessity of a more comprehensive and thorough approach to sanctions checks and due diligence processes,” according to the internal report.

The case highlights the challenges that commodity traders face when handling grains sold by Russia, the world’s top wheat shipper. In December, President Vladimir Putin said Russia’s latest bumper harvest included 5 million to 6 million tons of grain from Kremlin-controlled regions of Ukraine, according to Interfax.

Western nations haven’t sanctioned Russian food shipments. Any disruptions to grain supplies from the pivotal Black Sea region could fuel both global shortages and inflation.