©2012 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
©2012 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
©2012 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
GENEVA, SWITZERLAND – Angela Merkel, German chancellor, has her first-ever meeting with her new French counterpart, Francois Hollande, who takes office as president Tuesday 15 May before flying to Berlin.
The two meet the day after eurozone finance ministers get together, Monday, to find a way forward with policy, just as voters are moving towards more extreme positions in a number of country’s.
Merkel’s own Christian Democrat party lost heavily in the key state of North-Rhine Westphalia Sunday and Greece is finding it increasingly difficult to put together a coalition government. Merkel continues to push for austerity as the key to solving the eurozone economic crisis, while Hollande campaigned for office on a platform of increasing spending.
The Guardian offers a glum picutre, “Against a background of intense volatility, Europe was pulled in opposing directions by voters, protests, and political paralysis at the weekend, deepening uncertainty over its future shape and gnawing away at the prospects for the euro‘s survival as a 17-country union.”
Reuters earlier reported on the OECD’s latest figures: “Economic activity in the euro zone is diverging, with Germany leading a group of economies showing slightly more positive signals while France and Italy are posting sluggish activity below long-term trends, the OECD said on Thursday.”
Rega's 3 air ambulance jets were used in March to repatriate injured children home to Belgium after a horrific bus crash in Sierre
BERN, SWITZERLAND – The issue of Swiss neutrality is raising its head in parliament with the confirmation by Rega that it has carried out repatriation flights of wounded US soldiers from Afghanistan and Iraq, reports RTS public broadcasting.
Rega, which provides emergency medical repatriation flights for a number of clients, notably insurance companies, confirmed the information in response to a 2 May article in Handelszeitung that says the private company has run 17 flights.
Last month Rega celebrated its 60th anniversary, noting that 2011 was a record year in terms of the number of rescue missions, more than 14,000.
Rega has not confirmed any details except to say it has delivered wounded soldiers to the Ramstein air base in Germany and that it has not worked directly for the US armed forces. According to RTS the company says it makes 150 foreign repatriations a year out of 700 total, and fewer than 20 involve soldiers. Rega says it makes no distinction about the side soldiers are fighting on, in line with Swiss neutrality and International Red Cross principles.
The company takes on work outside its main Swiss emergency medical air evacuations in Switzerland mainly outside the tourist season, when its planes and helicopters are not in full use.
The issue comes at a sensitive time for Rega, whose supporters have a bill coming up in parliament to exonerate the non-profit group from paying TVA (value added tax). It was hit in 2010 with a CHF5 million bill for taxes, when the tax office decided its annual dues for members were a form of insurance.
GENEVA, SWITZERLAND – Global military spending remained practically unchanged in 2011, but budgets saw strong increases in Russia and China, while military expenditure fell in the United States and in Europe due to austerity measures.
The Swedish think tank, Stockholm International Peace Research Institute, (Sipri), published the figures Tuesday 17 April.
Overall spending was $1.73 trillion or 0.3 percent above 2010, the group said in its annual review.
The US remains the top military spender at $711 billion, in spite of a 1.2 percent cut, the first reduction since 1998.
Central and Western Europe military spending fell by 1.9 percent, with Germany down 3.5 percent and France 1.4 percent.
China, the world’s second biggest spender at $143 billion, increased its budget by 6.7 percent. Russia’s military budget rose a whopping 9.3 percent in 2011 to $72 billion, overtaking the United Kingdom and France, to make it the world’s third largest spender.
Links to other sources: The Guardian, Voice of Russia, Radio Canada, Washington Post
BERN, SWITZERLAND – The European Commission 17 April gave its approval to two tax deals by its states with Switzerland. The German opposition may still be opposed to the tax deal drawn up with its neighbour, but European Commissioner Algirdas Semeta told a group of reporters in Brussels Tuesday that the agreement is legal and can go ahead, and the same holds for an agreement between the UK and Switzerland.
The EU has been cited frequently by the media since last September when the German agreement was signed, for arguing that the agreements were illegal or fly in the face of efforts to encourage EU-wide agreements. Both agreements underwent revisions as a result.
The newly-signed agreement with Austria is still under review by the commissioner’s office.
GENEVA, SWITZERLAND – A long-range rocket launched by North Korea Friday 13 April to mark the 100th anniversary of the regime’s founding leader exploded 90 seconds after taking off, nonetheless drawing condemnation from G-8 countries.
A joint statement from foreign ministers of the G-8, which comprises the United States, Russia, Japan, Canada, the United Kingdom, France, Germany and Italy, condemned the action, and said they may request an “appropriate response” from the United Nations Security Council.
Switzerland also condemned the North Korean move.
The launch, which North Korea said was intended to put a satellite into orbit, has been widely seen as an attempt to test long-range missile technology forbidden by UN resolutions.
The failure of the much-lauded Unha-3 rocket was reported on national television in North Korea, in a rare demonstration of candor. A statement said that it had failed to enter orbit.
The UN Security Council is scheduled to meet Friday to discuss the launch.
Links to other sources: BBC, The Guardian, MSNBC
BERN, SWITZERLAND – Switzerland and its neighbour Austria Friday 13 April signed an agreement calling for Swiss banks to withhold tax on income from offshore accounts held by Austrian citizens. The account holders will then have to decide to either forfeit the tax or declare the accounts. The agreement is similar to those signed by Germany and the UK and, like those, opens up the Austrian financial services market to Swiss companies.
A flat-rate one-off payment “for regularizing the past” is 15-38 percent depending on the size of the assets and how long the client has had the banking relationship. A single rate of 25 percent will apply for future investment income taxation, which Bern explains corresponds to Austria’s capital gains tax. Austria has no inheritance tax, so this is not an issue.
Bern’s statement Friday afternoon states bluntly that Switzerland “does not want any further untaxed assets in the future”. It noted that “both sides acknowledge that the agreed system will have a long-term impact that is equivalent to the automatic exchange of information in the area of capital income.”
It outlined how the deal will work:
“Under this agreement, persons resident in Austria can retrospectively tax their existing banking relationships in Switzerland either by making a one-off tax payment or by disclosing their accounts. Future investment income of Austrian bank clients in Switzerland will be subject to a withholding tax, and the proceeds of this will be transferred anonymously to the Austrian authorities by Switzerland. In addition, mutual market access for financial services will be improved. The agreement requires the approval of parliament in both countries, and should enter into force at the start of 2013.”
Switzerland and Austria in tax deal negotiations
Swiss President Eveline Widmer-Schlumpf
BERN, SWITZERLAND – Switzerland cannot make more concessions as part of tax treaties with Germany and the US while respecting Swiss law, Swiss President Eveline Widmer-Schlumpf says in a lengthy interviewed published by Zurich newspaper NZZ 13 April. The Swiss president says, however, that the US case against St Gallen bank Wegelin has left open the possibility that the Swiss government may take some Swiss banks to court to avoid letting individual banks pose a threat to the entire system.
She says in the interview that the Swiss government has already completed reviews of a number of bank client cases requested by the US government and many stand unchallenged.
The Federal Administrative Court decision this week in favour of a Credit Suisse client’s opposition to his bank data being given to the US covers just one category of clients, she points out, and should not have a major impact on the overall situation. But it will oblige the US to be more precise when it makes requests for administrative assistance in suspected tax fraud cases.
Widmer-Schlumpf also clarified that Switzerland is seeking two agreements with the US, one that would provide a framework in which the 11 Swiss banks under investigation by the US would negotiate fines with the US Justice Department, and another that would cover 300 other Swiss banks’ past activities to end the US starting new legal proceedings every year. Switzerland is not in negotiations with the US over amounts of fines for the 11; this is up to the banks themselves, she says, but Bern is discussing sums with the US for the Swiss banking industry as a whole, to settle potential differences over past activities. The accords could be intergovernmental agreements or treaties, she notes.
The tax treaty with Germany, already signed by both governments but not yet passed by their parliaments, has been the subject of heated debate in Germany. Widmer-Schlumpf says that if the new treaty as it now stands is not what Germans want, then the best solution is the status quo. The new double taxation treaty would require Swiss banks to charge a withholding tax on income earned by German citizens’ accounts, which they would then have the option to reclaim by declaring the income and thus their assets.
A similar treaty was signed with Britain. The European Union has objected to the bilateral agreements, arguing for a single solution. Widmer-Schlumpf confirmed in the NZZ interview that negotiations are underway with Austria and other states have expressed interest in similar agreements.
Media charges of tense relations over tax issues denied by both governments
German political world, media reactions mixed
BERN, SWITZERLAND – German and Switzerland signed a “Supplemental Protocol” to their September 2011 tax agreement, Thursday 5 April. Bern issued a statement noting that “The essence of the agreement remains unchanged, that the taxation of German capital assets in Switzerland is ensured for the present and the future and thereby places relations between Switzerland and Germany on a forward-looking basis.” The new protocol and agreement are now ready for the countries parliaments to review.
The German government, like the Swiss government earlier in the week, denied press stories that relations are strained over another tax issue, arrest warrants issued by canton Zurich’s attorney general for three German tax collectors, linked to data that was stolen from a Swiss bank in 2008.
But in Germany, the political left reacted negatively while the media reaction was “more nuanced”, reports Swiss public broadcasting, adding that there is little likelihood yet more concessions on the part of Switzerland would muster support here.
The details of the new agreement, as listed in the Swiss statement, are likely to prove interesting to other governments looking for ways to force their citizens to declare tax money they have hidden in Switzerland:
- “After the agreement has come into force, inheritances which occur will be covered. In the case of inheritance, heirs must consent either to collection of a 50% tax or disclosure.
- “In the case of flat-rate taxation of the past, the size of the tax burden has been increased. Instead of being between 19% and 34% as it was up to now, the tax rate is now at least 21% and no more than 41%.
- “In addition the number of possible requests for information after entry into force of the agreement have been increased from a maximum of 999 to a maximum of 1,300 within a period of two years. This option extends and supplements the exchange of information according to the OECD minimum standard.
- “With the entry into force of the agreement on 1 January 2013, German taxpayers will no longer be able to shift assets out of Switzerland to third countries without notification. The appointed deadline was brought forward from 31 May 2013 to 1 January 2103.
- “It was made clear that interest payments which are covered by the Taxation of Savings Income Agreement with the European Union or will be covered by this in future, will be excluded from the scope of the agreement. In this way, the concerns of the EU Commission regarding compatibility with EU law have been removed as was the case with the tax agreement between Switzerland and the UK.
- “The regulations on the distribution in Germany of the revenue generated will be taken from the tax agreement. Within the scope of a German legislative procedure concerning the one-off flat-rate tax payment a higher proportion of the German Länder and communes will receive payment than would have resulted from the distribution key in the case of tax on investment income.
- “Individual models which come under the anti-abuse provision will now be described. In addition, monitoring implementation of the agreement by the competent Swiss authority and by an independent auditing company and the appointment of German Länder representatives on the so-called joint commission has been specifically laid down.”
ZURICH, SWITZERLAND – The dust was starting to settle over the tax deal between Switzerland and Germany Friday 30 March when a new whirlwind was kicked up with the Swiss asking for German assistance in charges brought against three German tax inspectors.
The Swiss Federal Tax Office announced late Friday that the German government had confirmed during the day it intends to approve the tax deal, which has caused heated debate in the European Union. Switzerland had asked for clarification of the situation by the end of March in order to put the new agreement into effect at the start of 2013, as planned.
Agreements with Britain and Germany were two of the nearly 40 revised double taxation agreements Switzerland has drawn up with other countries since it agreed to follow OECD recommendations in this area, but they prompted negative reactions from the EU, which threatened to take its two member states to court. Earlier this month the UK and Switzerland signed their deal, which goes into effect in January 2013.
The German agreement is similar to the UK one in that it calls for a withholding tax on income from accounts in Switzerland held by Germans but an important element for the German government is a one-off payment by German citizens on capital in Switzerland to settle past unpaid taxes. The statement by the Swiss did not clarify the amount of the withholding tax, which some media are reporting is still being negotiated. The treaty that was negotiated and initialed in August 2011, listed as 25 percent at the time.
The German SPD opposition party insists the treaty will have trouble getting approval by the Bundesrat (parliament).
Industrial spying charges add new twist to tax chases
Saturday the Swiss attorney general announced his office has issued arrest warrants for three German tax inspectors who are accused of accepting stolen goods in a case that dates back to February 2010. The three are accused of industrial espionage in accepting bank data offered to them on a CD in 2008.
Reuters cites him as saying in a statement that “There is a concrete suspicion that specific orders from Germany were issued to use espionage to obtain information from Credit Suisse. The attorney general has asked German authorities for assistance.”
BASEL, SWITZERLAND – The Canadian men’s team won the opening round of the eight-day world curling championship in Basel Sunday 1 April, defeating Germany 9-2, after neatly dispensing with the American team 8-7. Canada earlier defeated France.
The game is popular in Switzerland, notes Canada’s TheSpec/Canadian Press, with 160 clubs and 800 registered players, but Canadians on hand for the finals were puzzled by the quiet and relatively small crowd. “It was so quiet during the morning game that banter between curlers could easily be heard from the stands. The occasional cheer, the steady whir of stones sliding down the ice and buzz from the brushers were essentially the only sounds in the rather cavernous 9,000-seat venue. Official attendance figures weren’t released but organizers estimated that 800 spectators were on hand in the morning. A manual head count revealed less than half that number.” The evening match, says TheSpec, appeared to pull in about 1,800.
The crowds might just be warming up, with a cheering throng in the streets for the opening parade, reports the Winnipeg Free Press.
The medal game are 8 April in Basel.
Ed. note: tickets are available online from the Men’s World Curling Championship site; CHF30 for most matches and CHF50 for next weekend’s finals.
Last of the founding Baer family members to end senior role
Raymond Baer
ZURICH, SWITZERLAND – One of Switzerland’s oldest and most successful private banks, Julius Baer, will see the end of direct ties with members of its founding family at the 11 April annual general meeting (AGM). Raymond Baer, 52, said Monday he will not stand for re-election as chairman in what the Financial Times called an “unexpected move”.
The news comes almost a year to the day after his father, Hans Baer, died, age 83. Raymond Baer’s grandfather founded the bank and several family members have been involved in managing it over the years.
He will continue to work with the bank as head of a commission that will deal with tax issues, including investigations by the US Department of Justice. Bank Julius Baer is one of 11 Swiss banks under investigation for helping American taxpayers with offshore accounts to avoid paying US taxes.
The bank said in a statement Monday 19 March that Raymond Baer will become honorary chairman when he steps down from his current role.
The Board has nominated Daniel Sauter, member of the Board since 2007, for election as non-executive chairman at the 11 April AGM.
The bank and Baer insist he is retiring as chairman for personal reasons, ready to move on after 24 years at the bank where he worked in various management positions, but notably as head of private banking for 10 years and chairman of the board for 9 years. International media are mostly picking up a Reuters story that implies he is making the move in order to focus on his work as head of the commission.
Swiss Parliament, Bern
BERN, SWITZERLAND – The lower house of the Swiss parliament Monday 5 March voted strongly in favour of an amended US-Swiss tax treaty, 116-52, thus backing a vote by the upper house in December 2011.
Some foreign media coverage of the vote implies that the treaty is designed to help out 11 Swiss banks under investigation by the US Justice Department for illegally assisting Americans in the US to hide money offshore from the IRS, the tax arm of the US.
But the treaty was in fact agreed to in June 2011 by both governments. Credit Suisse announced in June 2011 that it was being investigated by the US Department of Justice and the cantonal bank in Basel nearly a year ago, while other banks, whose names were announced only in January 2012, apparently became aware of the investigations late in 2011.
The revised treaty grew out of negotiations that had been going on since the 2009 debacle where the Swiss government approved UBS turning over data on thousands of bank clients as part of a deal with the US.
The death of banking secrecy greatly exaggerated?
The right-wing UDC has been vocal in opposing the treaty, arguing that it signals the death of banking secrecy and is financial suicide, while some Swiss-German media have been making dire predictions for months, often reported as news from unnamed sources, about the impact of such a vote. Both have been picked up widely outside Switzerland as a sign that the treaty signals the end of banking secrecy, a view not held by many middle of the road politicians and the government, as well as the Bankers Association, which 22 February came out in favour of a regulation that would require offshore banking clients to make tax self-declarations. RTS, public broadcasting, says there has been a significant shift in banking secrecy since 2009, but Switzerland continues to support it as part of a broader respect for privacy. Today’s vote, it notes, should allow US-Swiss talks over American investigations into Swiss banks to move ahead.
The treaty is designed to replace a 1996 treaty, currently in effect. Both provide for judicial assistance in cases of tax fraud, but the new treaty defines the framework for this more precisely and admits tax evasion as well as fraud, in some cases, as grounds for a request for assistance.
Tax evasion is a crime, but not a penal offense in Switzerland, whose list of allowable tax deductions is far shorter than those of the IRS, and evasion has until now not been accepted as grounds for assistance.
New agreement amended in November
The June agreement was amended in November after a parliamentary commission recommended, 7-3, that this addition be made: it allows for group requests covering several financial accounts to be made together and, significantly, bank data could be given to US authorities without the US first providing a name and account number, although this assistance would be provided in a very limited number of cases. The change was initially expected to face stiff opposition in Parliament, but in the end it passed with a strong majority.
Switzerland and the US have been discussing, in separate talks, the case of the 11 Swiss banks under investigation by the US Department of Justice. The Swiss government in late January approved the delivery of coded bank data to the US as a goodwill gesture, with President Eveline Widmer-Schlumpf noting that the data could be decoded once the two countries reach a “global agreement”: “We will only decode when we have found a solution with the United States on all the banks that are under discussion.”
UK, Germany should revise part of agreements with Swiss, says EU tax head
European Union Tax Commissioner Algirdas Semeta said in a letter to Denmark’s prime minister 5 March that the UK and Germany will need to revise part of the tax agreements they have negotiated with Switzerland since last summer. Bloomberg reports that “when countries make bilateral tax agreements with other nations, EU policy calls for them to leave out any areas covered by a common European framework, Semeta said. In the case of savings income, the bloc has existing information-exchange rules and is working on additional measures related to interest payments, ownership stakes and the 27-nation EU’s relationship with Switzerland, he said.”
Semeta’s remarks were more positive than earlier EU threats to sue Switzerland for working out bilateral deals with two of its member countries.
Background story, GenevaLunch, “Swiss government raises the ante for banks, other countries”, 22 February 2012
Home friendly for Switzerland with Argentina
Two big ones are England vs The Netherlands and Germany vs France
GENEVA, SWITZERLAND – Football fans who are not heading to Bern for the 29 February evening friendly with Argentina are likely to be glued to the TV, with this game broadcast on RTS (new name for Swiss TV and radio) and two major matches also being aired: England versus The Netherlands friendly at Wembley and Germany vs France in Bremen.
BERN, SWITZERLAND – The Swiss government announced the first phase of a strategy “for a credible, tax-compliant and competitive Swiss financial centre” Wednesday 22 February. The statement for the first time puts the emphasis on future offshore clients stating they are tax-compliant at home before an account will be opened.
The Federal Council says it has asked the Federal Finance Department to draw up the details of the strategy and it expects to announce a series of concrete steps by September 2012. Today’s statement provides an outline of what is to come.
The first step must be to settle past tax problems, says Bern, “in particular cases of clients living abroad whose assets have not been correctly taxed.” Existing clients’ assets will have to be “regularized” from a “tax viewpoint, thereby lowering the legal risks for banks”.
This will be followed by a three-prong programme that focuses on international cooperation and future taxation of investment income and capital gains for offshore accounts:
- International withholding tax agreements, beyond those negotiated with Germany and the UK: Bern calls this “an effective means of taxing taxpayers in accordance with the regulations of their country of domicile while safeguarding their privacy”. It notes that some issues “have not yet been fully resolved, [but] there is international interest in this approach”.
- Improved administrative and mutual assistance based on international standards as laid out in double taxation agreements (DTAs). Serious tax crimes and money laundering investigations will be more closely linked, but the key part of this will be the new Tax Administrative Assistance Act, out for public consultation until April. It replaces an ordinance that has been in place since October 2010, implemented quickly so that Switzerland could comply with an OECD deadline to observe its standards. The new law, Bern announced earlier, “assumes the basic features of the provisions of the ordinance. It contains the principle that administrative assistance will be provided exclusively upon request in individual cases. Switzerland will not provide any administrative assistance in the case of requests based on stolen data. Unlike the ordinance, which covers only administrative assistance in accordance with double taxation agreements, the Act also governs administrative assistance based on other agreements which make provision for the exchange of information relating to tax matters, for example the agreement on the taxation of savings income with the EU. The appeal procedure is to be streamlined and the deadlines shortened.”
- Tougher due diligence requirements for banks to more effectively prevent them from accepting untaxed assets; foreign clients will be required “to make a declaration on the fulfillment of their tax obligations”.
Switzerland manages the largest amount of private offshore funds in the world, 27 percent. The Swiss argue their share is more the result of financial management skills than banking secrecy and the new government strategy is banking on this. The Swiss have nevertheless found it hard to shake off the old cliche that the country is a tax haven (according to OECD definitions it is not, although Tax Justice Network views it differently), in a world where wealth management is rapidly changing.
Boston Consulting publishes an annual report on worldwide private assets under management and in May 2012 it noted that in the previous year these assets had grown by 8 percent to a record $121.8 trillion. It issued a press release noting that:
“‘Offshore private banking remains a tumultuous part of the business,’ said Anna Zakrzewski, a BCG principal and a coauthor of the report. ‘The relative importance of offshore centers is changing rapidly. Some are benefiting from continued asset growth, while others are suffering large asset outflows, with wealth being repatriated to onshore banks, transferred to other offshore centers, redirected into nonfinancial investments, or simply spent at a faster rate.’
“For most clients, however, the core value proposition of offshore banking remains, Zakrzewski said. ‘Offshore wealth managers offer a sense of stability and security that these clients cannot find in their home countries. Other clients value the expertise or access to certain investments provided by offshore private banks. To continue to grow, offshore wealth managers will need to adapt to the changes imposed by the push for greater transparency while accentuating their strengths in areas that remain extremely relevant to clients around the world.’”
Switzerland’s announcement comes at a time when media have been speculating whether the country and the US are reaching an agreement over a fine a group of 11 Swiss banks would pay, linked to US accusations they helped American citizens and residents hide money offshore in an effort to evade taxes. (Ed. note: The announcement was covered by Business Week/Bloomberg, Reuters, Wall St Journal)
The strategy outline was welcomed Wednesday by the Swiss Bankers Association, which notes that “the SBA has been working on risk-based codes of conduct that impose on banks due diligence measures, in a similar way to the well-established Swiss approach to combating money laundering.” The group cautions, however, some aspects could backfire. “The codes of conduct will stipulate a risk-based approach whereby it makes sense for banks to obtain a declaration from clients about their tax situation (“self declaration”) if they have indications that the clients have not complied with their tax obligations. However, the SBA rejects a systematic duty of self-declaration as it has no credibility abroad, is unlikely to become an international standard, does not provide a solution for assets already deposed in Switzerland and casts suspicion over all clients.”
The group also argues that “it is important that in Switzerland not only banks but also all financial intermediaries be required to implement these new provisions. In addition, Switzerland must make every effort to ensure that other financial centres also resolutely commit themselves to tax compliance and take appropriate measures involving locally based financial intermediaries.”
Britain, France, Germany, Italy Spain: US citizens’ bank data in exchange for US reporting some of their citizens’ bank accounts
Overseas Americans already caught in crosshairs
GENEVA, SWITZERLAND – A proposed deal that is being hailed by the six countries involved as a step forward in their fight against international tax evasion ironically borrows from a Swiss solution proposed as part of new double taxation treaties. In both cases data on foreign citizens is not turned over directly to the other government by financial institutions. Instead, the banks would hand data on foreign clients to their own governments, which would pass it on.
The US and EU-5 proposal comes as Swiss and US negotiators grapple with differing interpretations of a pending a new tax treaty. Strict Swiss data protection laws have been a sticking point. The Swiss have insisted they will not accept “fishing expeditions” but will accept bulk requests where tax fraud or evasion is shown to be likely.
Switzerland proposed for its recently negotiated double taxation treaties with Germany and the UK that Swiss banks collect withholding taxes that the Swiss government will then pay to these countries. Their citizens can elect to declare the assets and get the withholding tax back or cede it to their governments if they do not want to declare their accounts.
The news of the six nation proposal came at the same time 8 February as the publication of 355 pages of regulations for Fatca, new US legislation designed to fight tax evasion.
EC applauds government to government approach
Europolitics reports that the European Commission was happy with the news.
“The European Commission issued a statement applauding these arrangements: ‘Thanks to this intergovernmental approach – the only one conceivable for now because it is rapid – to the exchange of tax information, the extra administrative costs, compliance costs and legal impediments (related to data protection) that financial institutions in the EU would have experienced will be considerably reduced’. The financial sector itself has estimated at US$100 million the extra costs for a multinational European bank as a result of implementation of the new legislation.
“For the Commission, which opened the debate on FATCA with Washington in April 2011, any EU member state should now be able to adopt this government-to-government approach to information exchange by concluding ‘coordinated bilateral agreements’ with the United States. Washington is considering developing other partnerships with third countries.”
Automatic data handover part of the likely new deal, but reciprocal
The new agreement between the US and Britain, France, Germany, Italy and Spain would see financial data for all Americans automatically handed by these countries to the IRS, the US tax arm.
In return, the US would hand over data, too, but, in addition, the other countries’ financial institutions would benefit from being included in a group registration with the IRS. The result: complying with Fatca would be far less expensive.
The US argues the new arrangement would lower the cost of implementing Fatca—and that it will at the same time bring the other governments information about bank accounts held in the US by some of their own citizens, those with offshore accounts.
Significantly, too, “the Fatca partner [country] would not be required to terminate the account of a recalcitrant account holder”, an American who did not report account information to the IRS, according to the US Treasury.
The reporting requirements and burdens would not be the same: the US is asking for all US accounts to be reported because it is the only country besides Eritrea to tax its citizens on the basis of citizenship rather than residence. The five European countries would be given data only on their citizens who have US accounts but who are resident in the home country.
Ed. note: Eritrea was condemned in 2009 and again in December 2011 by United Nations Security Council resolution 2023, for destabilizing the Horn of Africa region. Eritrea is sanctioned in part for its diaspora tax, used for military purposes. The US voted in favour of the sanctions. The only other country, according to Wikipedia, that has a citizenship-based tax system as opposed to residence system, was the Philippines, but it changed to a residence system in 1995.
Fatca: data privacy concerns circumvented by reporting to banks’ own governments
Fatca, the Foreign Account Tax Compliance Act, is a US law that went into effect in March 2010 but which is only gradually being implemented. It requires foreign financial institutions (FFI’s) to report to the US government US accounts, according to the US Treasury Department’s press release on the six-nation proposed agreement Wednesday 8 February.
Fatca’s implementation has been rescheduled several times and it has been the subject of much heated debate in the financial industry. The US Treasury Department in its press release concedes that Fatca “has raised a number of issues, including that FFIs established in these countries may not be able to comply with the reporting, withholding and account closure requirements because of legal restrictions.”
Data protection laws have been part of this debate in the UK, for example.
Questions have also been raised about the legitimacy of the American government writing laws that apply to non-US businesses, the FFIs, outside the US.
Fatca and Americans living outside the US: not tax evaders
US expatriates have voiced a number of concerns about Fatca, starting with its failure to distinguish between Americans in the US with offshore accounts and Americans who are resident, particularly long-term, overseas.
American Citizens Abroad (ACA), a Geneva-based international non-profit organization, in 2011 and after public debate in town hall meetings, called for the outright repeal of Fatca, saying it “destroys lives and the US economy”.
Growing number of Americans in Switzerland refused regular bank accounts
A Town Hall meeting of Americans in Geneva Wednesday 8 February called for a show of hands of those who have been turned down for a bank account in the past year: an estimated 50 percent said yes, and afterwards some people admitted privately they haven’t told their banks they are American for fear their accounts will be closed.
The US is currently investigating 11 Swiss banks for aiding wealthy Americans based in the US to evade taxes. More importantly, for Americans who live in Switzerland, Swiss banks, like those elsewhere, are preparing for Fatca, and US clients may be viewed as a liability.
ACA has been gathering growing evidence that US residents abroad, even if they file taxes, are being refused bank accounts and that financial institutions are beginning to divest themselves of US securities.
The New York Times in an article published 9 February says “Fatca has also been criticized by American expatriates because it imposes new reporting requirements. Some have said it makes Americans less attractive as clients for financial institutions, raising the cost of doing business overseas. Those criticisms were not addressed in the proposed rules.”
Tax evasion effort tacked onto jobs bill
Fatca was passed by the US Congress to little fanfare in 2010, tacked onto a much larger jobs bill called the Hire Act. President Barack Obama when he signed it, made reference to four of the five parts of the Hire Act, never mentioning the foreign tax compliance section. The IRS web page devoted to Hire initially failed to mention Fatca as well (Hire Act (pdf).
The US Treasury Department press release yesterday mentions that the five Fatca partners of the US would look at “certain accounts” as part of the agreement.
The law itself is more precise, stating that FFIs will be obliged “in the case of any United States account maintained by such institution, to report on an annual basis” several pieces of information:
“(A) The name, address, and TIN of each account holder
which is a specified United States person and, in the case of any account holder which is a United States owned foreign entity, the name, address, and TIN of each substantial United States owner of such entity.
(B) The account number.
(C) The account balance or value (determined at such time and in such manner as the Secretary may provide).
(D) Except to the extent provided by the Secretary, the gross receipts and gross withdrawals or payments from the account (determined for such period and in such manner as the Secretary may provide).”
It defines a US account: “In general.—The term ‘United States account’ means any financial account which is held by one or more
specified United States persons or United States owned foreign entities.” The exception is an individual whose aggregate accounts at one financial institution, including for example retirement accounts, are under CHF50,000 in a given year.
Zurich airport
ZURICH, SWITZERLAND – More morning and evening flights, but fewer flights over southern Germany from Zurich: this is the tradeoff agreed to by Switzerland and Germany, which announced Saturday 28 January they have signed an agreement to reduce noise.
The new accord is expected to go into effect in the summer of 2012.
Noise reduction in the southern German air corridor has been a contentious issue for a number of years and the two governments said in announcing the agreement that they also hope new developments in airplane technology will ease the situation.
Swiss, one of the main airlines using the corridor, has said it will be replacing half of its fleet there by 2020, according to TSR.
Switzerland has said it needs more flexibility for flights in and out of Zurich, particularly in the morning.
Zurich Airport had 20,911 “movements” of planes in December 2012, up 1.7 percent from a year earli.
GENEVA, SWITZERLAND – Italy’s new prime minister, Mario Monti, has told the country’s parliament, through his minister for relations with that body, that Italy should not seek a double taxation agreement with Switzerland along the lines of those with Germany and the UK.
But the opposition then accused him of not being open to negotiations with Switzerland, which has expressed its willingness to seek an agreement, and of not going after the CHF14-15 billion such an agreement could bring into the Italian government coffers.
The European Commission has said it is opposed to such agreements, which allow Switzerland to respect its banking secrecy laws and partner governments to collect tax revenues for their citizens holding Swiss bank accounts. The UK and German agreements call for Swiss financial institutions to collect withholding taxes on transactions, money that is paid to the foreign treasuries. Account holders then have the choice of coming forward and announcing their holdings in order to recuperate the tax, or remaining silent and forfeiting the tax.
Switzerland: equal work, but not equal pay
BERN, SWITZERLAND – The Swiss government 5-6 December took part in European Union best practice discussions in Berlin covering how to eliminate salary differences between men and women.
It was invited to join the discussions, hosted by Germany, and present its Logib software, a self-check software programme that the Swiss Confederation uses and which can be used easily, internally, by companies of at least 50 employees.
Germany and Luxembourg are using the software, as are companies in Switzerland that have government contracts.
Swiss companies have shown less enthusiasm, the federal government noted in mid-November, with only 20 companies signing up for a salary review programme.
Recent figures published by the Swiss Justice and Police Department show that men continue to earn nearly 20 percent more than women for equal work.
Swiss photographer Michael Grob on his work with Cambodian landmine victims: "Unlike in Afghanistan which is still in a state of war, we had to learn to adjust to the reality of such an amount of mines still being in Cambodian soil so long after the fighting has stopped. It was at times very difficult for me to deal with the impression left by the very high number of mine inflicted casualties - especially those of injured children. The work of the UN in Cambodia is, in my eyes, of utmost importance. It is for some communities the only opportunity for some kind of future. The situation touched me deeply and profoundly...my work for the United Nations mine action - as insignificant as it might be in the bigger picture - shall go on as long as needed." (©2011 Michael Grob)
GENEVA, SWITZERLAND – Efforts to get rid of landmines are making good progress in many countries and funding is being maintained despite government budget constraints, a key meeting in Cambodia that closed 2 December shows. But work remains, with 4,000 new victims of landmines each year: six people died in Pursat Province, Cambodia, which hosted the meeting, Thursday 1 December when their truck triggered a mine.
The 11th meeting of the States Parties, the 158 nations that are part of the Anti-Personnel Mine Ban Convention finished in Phnom Penh with several strong commitments.
The Netherlands stated that “despite cuts in other areas, the government remains convinced of this matter” and it will maintain its €15 million annual contribution to demining and victim assistance.
Austria is increasing its 2012 funding slightly, to €1.9 million.
Cambodia funding stepped up
Austria announced its first contributions to demining and victim assistance in Cambodia, totaling €400,000. New Zealand, too, will contribute to a demining project in northeastern Cambodia: more than US$ 1 million in 2012.
Burundi bright spot
Cheering news came from Burundi, which says it has completed demining, a full three years ahead of the deadline to which it was committed. It is the 19th country to be declared mine-free.
Myanmar told the landmine ban meeting in Cambodia at the end of November that it is carefully considering the matter (Photo, ©2011, AP Mine Ban Convention)
The meeting, with 1,000 delegates taking part, marked progress in a number of areas and made media headlines over the first-ever participation by Myanmar, as an observer.
The isolated nation has been making commitments to reform, and at the land-mine ban meeting it said that “thorough study of the treaty will be continued”.
Its actions will be watched closely; it is one of three countries, along with Qaddafi’s Libya and Israel, who have been accused of laying mines in 2011.
“Convincing evidence” Syria is using mines
There is also “convincing evidence”, the group says, that Syria has used mines this year.
Tuvalu and South Sudan took their seats as the Convention’s newest adherents. Finland announced that it is on the verge of becoming the 159th to join the Convention.
Fifteen States that have not yet joined the Convention attended as observers, “signaling their openness to engage in a discussion on the devastating impact of anti-personnel mines”, a meeting press release states. The US is one of these and it reported that it is continuing to review its landmine policy.
Other signs of progress reported by the meeting: “Turkey reported the destruction of all stockpiled anti-personnel mines: 3 million mines. Burundi and Nigeria declared completion of their mine clearance obligations. Guinea Bissau, Jordan and Uganda announced that they will complete their demining programmes in coming months.”
A major and often under-funded part of the States’ commitments is helping survivors. Meeting host Cambodia, one of the most affected countries, says it is “assessing its national action plan on disability with a view to preparing a revised plan in 2012.”
Britain, Germany fail to meet commitments to demine
Germany is one of four countries with new reports of mine contamination that are falling far behind on their commitments to demine.
The town of Koblenz, Germany is the site this weekend of a massive project to defuse a bomb with 3,000 tons of explosives left over from the second world war; 45,000 people are being evacuated from their homes to allow the army and experts to get rid of it. The bomb became apparent this year due to lower water levels in the Rhine, reports NPR.
Britain has failed to clear any mines in the Falklands for the second year in a row.
“The UK has consistently failed to meet their clearance obligations under the treaty, and now have to clear more than 110 mined areas across over 7km2 in less than seven years,” the group notes.
Ed. note: the Swiss federal government’s entire public web site is down at noon Wednesday, so we are unable to provide links
BERN, SWITZERLAND – Switzerland’s Federal Council (cabinet) Wednesday morning approved a package of reforms for the International Monetary Fund (IMF) covering the world body’s governance and quotas. The package was approved by the IMF in December 2010 but is being implemented piecemeal as countries vote. The reforms were designed to give a stronger voice to developing economies and to redress imbalances that reflect an older world economic picture.
Switzerland’s contribution quota initially rose to 1.59 percent from 1.45 percent, but post-reform it will be CHF1.21, and Switzerland drops from the 19th largest contributor to 19th, after Korea and Australia. Its contribution from the Swiss National Bank will, however, increase significantly, from CHF3.6 billion to CHF7.3b, with the reforms doubling the ordinary contributions of countries.
The increase in contributions is the first major one since 1998, says Bern in a statement issued Wednesday, and is designed to more correctly align contributions with economies and financial flows.
Switzerland’s share of IMF votes also falls, from 1.40 percent to 1.57 in March after an initial set of reforms was implemented, and now down to 1.17. The US remains by far the largest contributor, with the largest vote, followed by Japan, Grmany, France and the UK.
ZURICH, SWITZERLAND – Credit Suisse Thursday pushed its GDP growth forecast down sharply, from 2 percent to 0.5 percent, for 2012. The bank points to the euro crisis, which “continues to weigh on markets, with economic momentum in Europe fading unexpectedly quickly.” Switzerland will be hurt by the fall in exports due to “decidedly gloomier” prospects for countries to which the Swiss export, and the accompanying fall in capital investment on new machinery and equipment.
Consumers and the construction industry, which continues to boom thanks to low interest rates, will prop up economic growth, the bank’s analysts say.
Renovations, new construction: building industry and consumption will prop up Swiss economy in 2012
But “a significant cooling of European growth is no longer avoidable”, according to Credit Suisse, and “while the US economy has accelerated again slightly following the dip seen in mid-2011, the opposite is occurring in Europe. Most significantly, economic momentum in Germany – Switzerland’s key trading partner – has slowed. At the same time, the partial spillover of the debt crisis to Italy has brought increased volatility on the financial markets, growing tensions on the credit and interbank markets, and falling confidence among households and businesses.”
Sentiment is more of an issue than home-grown problems, the bank notes, pointing out that Swiss public finances and companies do not have excess debt.
“On the contrary, interest rates in Switzerland will remain low until at least the end of 2012. In addition, inflation is not an issue in Switzerland at present; pressure on consumer prices is holding up, so purchasing power is safeguarded (inflation in 2012: 0.4%). Finally, immigration is likely to remain strong, meaning an important driver of the growth in consumption will remain in place. By contrast, the constant talk of crisis, together with a deterioration in the labor market situation (unemployment rate in 2012: 3.3%), is increasingly impacting sentiment, and poses certain constraints for the growth in consumption.”
Nuclear waste disposal in France and Swiss plant shutdowns prompt new concerns
Train with waste traveling from France to Germany today could spark new protests
GERMANY AND SWITZERLAND TO SCRAP NUCLEAR ENERGY, ©2011 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
BERN, SWITZERLAND – Decommissioning Switzerland’s nuclear power plants will cost 10 percent more as a result of inflation, an increase of about CHF2 billion, than the last estimates in 2006 showed, the Federal Energy Office said Thursday 24 November.
The companies that own the power stations and the waste storage facility are responsible for covering the cost of decommissioning as well as waste storage. They make annual contributions to two funds, with the contributions set for five year periods.
For 2012-2016, their costs will be increased by CHF127.67 million a year for waste management and CHF60.7m for decommissioning.
The increase is part of energy costs that must be approved by the government before companies can pass them on to consumers.
The cost study carried out by swissnuclear, mandated by the federal commission responsible for decommissioning and cost management, will now be evaluated by the Swiss Federal Nuclear Inspectorate, which will bring in independent outside experts.
Switzerland’s decommissioning will take until 2034
The Swiss government called a halt to nuclear power plant construction in May 2011, two months after the president announced a temporary moratorium. The measure amounts to the end of the country’s nuclear power programme.
The May decision covers four power stations with reactors and two research facilities with reactors, as well as waste disposal centres. The government is allowing the plants to operate until their licenses run out, which means the plants will all shut down by 2034.
Swiss Bankers Associatio CEO Claude-Alain Margelisch
GENEVA, SWITZERLAND – Few details have surfaced from the discussions between the US and Switzerland about a new “global solution for all banks“ that would end serial tax evasion investigations by US authorities, with both sides pledged to silence while negotiations are underway.
The head of the Swiss Bankers Association gave a rare glimpse into the talks when he said in Geneva Tuesday 22 November that his group’s role is to find a solution for “the rest of the financial sector” but not for the 11 banks under investigation by the US Justice Department.
The small group of banks, which includes Credit Suisse, is suspected by the US of helping American clients evade taxes by hiding money offshore.
Claude-Alain Margelisch, chief executive of the Swiss Bankers Association, qualified discussions with US officials as “productive”.
Margelisch, Swiss banking group head, met with int'l media in Geneva Tuesday
His group approached its members, he says, “to find solutions. I can say we’ve made progress.”
His remarks came in the context of a presentation to the Swiss Foreign Press Association on key banking events of the past year. The agreements with the UK and Germany were major accomplishments, he said, but these are not yet ratified and “we have to convince all parties” that the treaties are a compromise and the best way forward.
The group’s priority with the agreements is to see them ratified, he says. “Our view is that there can be no renegotiation”, as suggested by some German parliament members who are opposed to the treaty.
Swiss banks want to “draw a line under the past but protect the future,” he told the reporters. “Our strategy is clear: we want the clients’ [business] to remain in Switzerland and we want this business done correctly.”
ZURICH, SWITZERLAND – A German state is reportedly considering buying a disk with data about Germans holding bank accounts in Switzerland in order to evade taxes at home, according to a German financial paper. North Rhine-Westphalia has been offered a CD with details of 1,000 clients at the Zurich branch of private bank Coutts, a subsidiary of Royal Bank of Scotland, the newspaper reported late Wednesday.
The bank has not yet issued a statement.
If the information is accurate it comes less than three months after the new Swiss-German double taxation agreement became effective. The treaty, which some German politicians have called too liberal, appeared to calm relations between the two countries after a series of incidents in 2009-2010 that involved stolen bank data that another German state bought and accusations that UBS had helped clients defraud German governments.
Swiss forests (here, Bern) are an economic and environmental priority, but poor wood-burning stoves could counteract forestry efforts
BERN, SWITZERLAND – More than 15 percent of fine particles, those minuscule bits of dust that are harmful to health, come from wood-burning stoves, the Swiss federal government now says, twice the amount shown by earlier research.
Reducing the quantity is a public health priority, with the popularity of home fireplaces growing, but an changes to regulations need to be aligned with an economic and environmental priority, to better develop and exploit Swiss forests.
The amount of wood burned for fuel is on the rise in Switzerland, according to Swiss energy officials, and it is likely to continue to go up if fossil fuel prices rise.
Switzerland is closely watching the example of Germany, which recently tightened its laws for wood as an energy source. It lowered the acceptable limits for home fireplaces, including existing ones.
Pilot projects have been started in some Swiss cantons in an effort to find better tools for measuring home fire emissions.
Burn dry wood in a correctly installed and properly functioning fireplace, for your health
A group meeting in Bern this week concluded that there is a huge difference, in terms of health and air pollution, between good home fireplaces and those that don’t meet today’s standards. Quality is directly linked to proper installation, the group says, as well as correct use and burning the right materials.
The question is of growing importance because the number of automatic wood-burning stoves has tripled and the number of manual home wood-burning stoves (poeles) has doubled in the past 15 years according to the Swiss Energy Office.
Swiss authorities, researchers, firms and cantonal officials, many of them with Cercl’Air, met 8-9 November to discuss the effectiveness of air filters on home fireplaces and to review Swiss regulations governing small wood-burning units.
Switzerland’s law requiring certification for home fireplaces went into effect in 2007, but the implementation has been phased in, through 2012.
Cercl’Air is a group that brings together corporate and governmental Swiss air quality managers.
Today’s filters function mainly with electrostatic separation, but this works only if the fireplace is correctly installed and functioning properly. Studies are showing that a large number of wood-burning systems of medium- and large-size are not correctly installed, and these will be targeted to reduce fine particles in the short term.
More problematic are smaller units, under 70 kW, whose emissions are currently measured visually in most cantons to ensure, for example, that only dry wood and not household waste is being burned. But this approach is inadequate with older fireplaces that are not up to current standards.
Meanwhile, the Energy Office provides tips for anyone using wood for fuel, including avoiding creating too much soot through:
- proper ventilation in the fireplace
- using only dry wood
- lighting the fire properly
- avoiding using too much wood.
Federal Energy Office brochure on using wood-burning fires correctly (Fr, PDF)
Chinese tourists overtake Italians, catching up with French, British
Chinese tourists on Mt Saentis 29 October, next to Switzerland's first mountain peak weather station, commissioned in 1882: on a clear day six countries are visible from this point
BERN, SWITZERLAND – The Swiss franc continues to have a strong impact on European and US visitors to Switzerland, with the number of overnight stays by foreigners in September down 6.8 percent compared to the same month a year earlier.
Foreigners accounted for a little more than half of the industry’s 3.3 million overnight stays in September.
The overall figure for the year to date is down 2 percent, but in September overnight stays fell 3.4 percent.
The decline in European stays continued, with Bern attributing this largely to the over-valued Swiss franc against sterling and the euro. Visits by foreigners were down 6 percent, but European visitors’ stays fell by 11 percent.
German tourist numbers were down 13 percent, British 13 percent, Dutch 12 and Italian 11 percent. US visitors are down 9.4 percent, although the number of overnight stays by Canadians rose
Chinese tourists to Switzerland: rapid increase as Alps tug Asians
Mt Saentis 30 October: a popular destination for German tourists, is attracting Chiense visitors
Asian numbers and in particular overnight stays by Chinese tourists continue to rise, with a 12 percent overall increase that includes a 43 percent increase by Chinese visitors, some 20,000 overnight stays. For the year to date, Chinese tourists show a 58.6 percent increase.
Germany remains by far Switzerland’s largest tourist client country, with some 470,000 overnights to date in September. The US was second with 172,000, Britain third with 152,000, France fourth with 100,000 – and then the surprise of China, with 67,000 overtaking Italy, with 65,000.
Wanted: British skiers, snowboarders, holiday fans and winter hikers
The British figures are likely to cause particular concern, with the crucial ski season coming up. Swiss statistics show 1.43 million overnights from January to the end of September, and the fourth quarter tends to be low, but the industry is holding its breath looking at winter ski season reservations.
British statistics register “visits” by its citizens abroad rather than overnight stays, and in 2010 the number of visits was down to 896,000 from a 2008 figure of 1.16 million. The first quarter of the year, with the ski season, saw 294,000 British visitors in 2011, compared to 350,000 a year earlier.
British tourists travelled again in the second quarter of 2011, but with the weakening pound, travel increased to North America, remained stable in the European Union and dropped to countries outside the EU, which includes Switzerland. Travel outside the EU during April to the end of June was at a level last seen in 2009 and before that, iln 2005.
BERN, SWITZERLAND – Greece is the latest country to consider a bilateral tax agreement with Switzerland, a move that will not please everyone in the European Community. Bern announced Thursday afternoon that “State Secretary Michael Ambühl and Ilias Plaskovitis, the general secretary in the Greek Ministry of Finance, conducted talks on a possible tax agreement between Switzerland and Greece. Both parties discussed the possibility of a tax agreement like the ones Switzerland signed a few weeks ago with Germany and the United Kingdom.”
Bern notes that “the aim is to regularize the assets held by Greek taxpayers in Swiss bank accounts in the past as well as to introduce a tax at source on future investment income. Switzerland would forward the tax revenue to the Greek authorities on an anonymous basis. In addition, mutual market access for financial services should be improved.”
The two governments will now need to decide if they are opening negotiations. But Greece, with its just-announced EU bailout, could be under pressure from the EU, which is not entirely happy with Switzerland’s agreements with individual EU countries, according to PwC’s bimonthly “EU Tax Newsletter” in September. “It is widely believed in Brussels that the European Commission’s President Barroso and the EU’s Tax Commissioner Semeta have missed out on an opportunity to make the case for European integration / the “Community” method and publicly oppose the bilateral agreements by Germany and the UK, as they objectively undermine the EU’s position vis-à-vis Switzerland regarding tax fraud and tax avoidance and harmful tax competition (EU-wide Code of Conduct on Business Taxation), and talks with the US regarding Fatca [foreign ], wrote Bob van der Made, PwC Netherlands.
Swiss exports, imports (Source: Swiss Statistical Office, 20.10.11)
BERN, SWITZERLAND – Swiss exports and imports continued to expand in the first nine months of 2011, but with the rate of growth slowing down steadily and “losing strength” and reflecting the state of the world economy, the Swiss Statistical Office said Thursday morning in a press release.
Exports grew by 2.4 percent from January to September, CHF147 billion, with growth in the first two quarters but a decline in the third.
The growth was achieved despite falling prices, down 10.7 percent in real terms, although without including pharmaceuticals, prices fell by 7 percent.
Imports rose in the first nine months but by a weak 1 percent.
Switzerland showed a positive trade balance from January to September of CHF16.7b, a one-year 14.7 percent increase. A CHF17b surplus with Asia offset the CHF16.3b deficit with the European Union.
A bright spot: orders from Italy, France and Germany rose by 4 percent in September.
