New Swiss bank notes delayed to 2012
Zurich, Switzerland (GenevaLunch) – New bank notes for Switzerland will not come out until 2012, instead of autumn 2010, as originally planned. Security features to be added will require additional development and testing time, says the Swiss National Bank (SNB). The high level of security for the current bank notes means there is no urgency, it argues. Switzerland will keep the colours and denominations of the notes currently in circulation, but the new ones will be slightly smaller.
Links: SNB security features on Swiss bank notes, design details of Swiss bank notes, contest new bank note designs by Manuela Pfrunder, who was awarded the job (note: the new notes will not look like these)
Bern, Switzerland (GenevaLunch) – The Swiss Federal Council has accepted a parliamentary commission’s proposal that the television and radio licence fee be extended to include virtually everyone and not just owners of TV sets and radios. The council has asked Parliament to prepare a bill for consideration. Current federal broadcasting legislation will need to be revised as well.
The commission notes that mobile phones and personal computers are also used to receive radio and television broadcasts. It argues that the related administrative costs involved in billing and hunting down freeloaders are now too high.
The Federal Council says that if a greater number of businesses were charged licence fees the annual fee might be cut.
Zurich, home to banking thrillers
Zurich, Switzerland (GenevaLunch) – Call them whistleblowers if you believe their consciences have overcome them, or thieves if you think they’ve broken the law. Whatever the label, people who take client data from Swiss banks that employ them, then offer the information to another government, are suddenly back in the headlines.
French officials told Swiss news agency ATS Thursday evening 21 January that France has handed back to Switzerland data stolen by a French citizen. It made the announcement a day after the Swiss Finance Department said it would not provide administrative assistance to countries in cases where stolen information was used. France told ATS it has kept copies of some of the information, for its own investigations.
The data was stolen from British bank HSBC in Geneva, by Frenchman Hervé Falciani. The case came into the public spotlight late in 2009.
Switzerland is reviewing its legislation with an eye to setting clearer limits for handing over data to a treaty partner when it demands assistance in suspected tax fraud cases.
US newspaper says whistleblowers “chipping away” at bank secrecy
Falciani was not the first bank employee to pocket data. American Bradley Birkenfeld stole UBS client data in 2008 and gave it to the US tax authority, the IRS in a case that has had a major impact on the bank’s reputation and which badly strained US-Swiss relations.
To believe the New York Times 19 January, Swiss Rudolf M Elmer has just become the first whistleblower of 2010, a man who “is chipping away at the centuries-old traditions of Swiss banking secrecy,” in line with Falciani and Birkenfeld.
Zurich, Switzerland (GenevaLunch) – The Swiss National Bank expects to see a “large profit” of CHF10 billion for 2009, thanks to the rapid rise in the price of gold and currency fluctuations during the year. The valuation of the gold holdings of the central bank rose by CHF7.3 billion during the year, with the price of gold moving between about $800 and $1,200 an ounce (chart).
The bank’s foreign currency positions brought in another CHF2b.
The profits are shared in part with the federal and cantonal governments, some CHF2.5b.
Geneva, Switzerland (GenevaLunch) - The unfinished business of arms control is being taken up this week in two separate sets of talks in Geneva. Negotiations resume on the Russia-US Start treaty update and, separately, the UN’s Conference on Disarmament.
Russia and the USA begin negotiations again 22 January to agree on a treaty to replace the 1990s-era Strategic Arms Reduction Treaty (Start) which officially expired 5 December 2008.
The aim of the negotiations is to further reduce each country’s nuclear arsenal below levels agreed to in 1991.
Geneva, Switzerland and London, England (GenevaLunch) - The main lesson from 2009’s global financial and economic crises is that we need to recognize a fundamental need to change thinking on global risks and how they are managed, says the World Economic Forum. The Geneva-based group, which hosts its annual Davos meeting of world leaders 27-31 January in the Graubuenden resort, published its Global Risks Report 2010 Thursday 14 January. The reports’ authors call for “an overhaul of current values and behaviours by decision-makers to improve coordination and supervision”, saying that the governance gap remains too great.
The report is published annually, just ahead of the Davos meeting.
This year it points to “the impact of the fiscal crisis and the social and political implications of high unemployment rates in several major economies as key concerns.”
Davos during the World Economic Forum, 2009 (image: WEF)
Update 11:37 Bern, Switzerland (GenevaLunch) – The Swiss Army has begun preparations for the World Economic Forum in Davos, from 27-31 January 2010, with 200 soldiers dispatched to canton Graubuenden to begin making security arrangements. The army will supply 5,000 soldiers this year, the same as last, and the government will spend CHF1.5 million providing military security for the event. The cost is down slightly thanks to technical improvements, according to Bern.
The army provides security on the ground, including clearances for people attending the event, which pulls in top-level business and political leaders. The Swiss and Austrian air forces provide air surveillance.
Swiss military flights are flying over the Alps frequently this week, noticeable to skiers, but these are regular training flights, the military department confirmed to GenevaLunch. Military training linked to WEF begins closer to the event.
Tax revenues were down by €7.7 billion, or 19 percent, in Ireland for 2009, Department of Finance figures published Tuesday 5 January show. The drop in revenue combined with a €4b government bailout of Anglo Irish Bank pushed the national debit €11.9 billion higher.
Ireland’s high debt and the problems of Iceland, still trying to recover from the collapse of its economy a year ago, are likely to add to Eurozone woes in 2010, argues Ralph Atkins in the Financial Times.
Links to other sites: Financial Times, Irish Times
Update 2 22:50 Bern, Switzerland (GenevaLunch) - Reports were published Tuesday evening 1 December by several international news agencies that two Swiss businessmen, Max Goeldi and Rachid Hamdani, have been sentenced to 16 months in prison and fined $1,671 each by a Libyan court. Reuters received an e-mail confirmation from the Swiss foreign affairs ministry late Tuesday night confirming the news. The men have been sentenced on visa irregularities charges, according to the Swiss spokesman, Reuters reports. They are currently both at the Swiss Embassy. The two have been unable to leave the country since July 2008, shortly after Hannibal Qadaffi, the son of Libya’s leader, was arrested in Geneva for abusing his staff at a hotel. The arrest sparked a diplomatic row which has not been resolved, and the new sentences could strain tensions even further.
The two men, in Libya on business at the time of their arrest, were at the centre of intense negotiations in August 2009, when Muammar Qadaffi appears to have promised to help release them soon. Agencies reporting the story quote an unnamed Libyan official who also says the men face another trial, but no details were provided.
TSR, Swiss public television, early Tuesday evening reported that an official at ABB, the multinational that employs Goeldi, confirmed to the station that the men had been sentenced.
Bern, Switzerland (GenevaLunch) – “A ban on the construction of new minarets is not a feasible means of countering extremist tendencies,” said Swiss Federal Councilor Eveline Widmer-Schlumpf, speaking for the cabinet after the 29 November popular vote in favour of a ban. The Federal Council issued a statement Sunday afternoon saying that “the outcome of the vote reflects fears among the population of Islamic fundamentalist tendencies, which reject our national traditions and which could disregard our legal order,” with Widmer-Schlumpf, who is the minister for Justice and Police, adding that “These concerns have to be taken seriously.” Nevertheless, the ban will not counter terrorism fears, she noted.
Both the government and a strong majority of parliament came out against the ban before the vote.
The government insists that the ban is limited to new minarets: the four existing ones are not affected and building permits will continue to be issued for mosques, of which there are 150 in Switzerland.
Geneva, Switzerland (GenevaLunch) – The sign in front of the mosque in the Geneva suburb of Petit-Saconnex was covered in pink paint during the night of 25-26 November, reports the Tribune de Genève. It is the third time this month that the site has been a target for vandals and troublemakers: the façade of the mosque was stoned 15 November, and a week earlier a group of right-wing radicals made a false call to prayer at 07:00.
The country votes on whether or not to prohibit the building of minarets in Switzerland Sunday 29 November but some observers believe the vote is more about the changing role of Islam in Swiss society.
Links to other sites: ABC, Australia, Le Temps (Fre), TF1 (Fre), France, Tribune de Geneve (Fre)
Good or bad news, depending on which you are spending, buying: Swiss franc, dollar rates
Zurich, Switzerland (GenevaLunch) – The US dollar has slipped below parity with the Swiss franc for only the second time. The dollar fell below the franc 14 March 2008.
The Swiss franc, which has climbed in the past two days, was at 1.0030 against the dollar ($0.9993/CHF1 ) at 17:00 in Zurich Wednesday 25 November, but it dipped slightly to below parity at 18:00. Bloomberg attributes the change largely to the strength of the franc: “The franc has gained 1.6 percent against the dollar and 0.3 percent versus the euro in the past month as some investors bet that signs the economy is recovering may prompt the central bank to stop selling the currency.”
The US Federal Reserve Wednesday released minutes from its 4 November meeting, indicating that it was not overly concerned by the dollar’s fall.
Links to other sites: Bloomberg, FE.com, TheStreet.com, US Federal Reserve
US to be observer only at Cartagena summit
Demining demonstration in Tirana (photo: Cartagena Summit)
Geneva, Switzerland (GenevaLunch) – The United States will be attending the Cartagena Summit on a Mine-free World in Colombia 30 November as an observer only, following a review and recent decision not to sign the landmine treaty, US State Department spokesperson Ian Kelly said at a daily briefing in Washington Tuesday 24 November. The summit is the Second Review Conference of the Ottawa Convention, informally known as the landmines ban treaty. CNN reports that the decision comes as a surprise to observers who believed the US has been considering joining the 156 other nations who have signed the treaty, citing Human Rights Watch’s reaction. The decision also dashes hopes of the Geneva-based Cartagena Summit secretariat that the US would soon be a party to the treaty.
The official name of the treaty is the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Antipersonnel Mines and on Their Destruction. It’s also often referred to as the AP (anti-personnel) Mine Ban Convention. It entered into force in 1999. China and Russia are the only other major powers not to have signed the convention.
Not in interests of US defense needs
Kelly’s response when asked why the US is not signing the treaty was that “we made our policy review and we determined that we would not be able to meet our national defense needs, nor our security commitments to our friends and allies if we sign this convention.”
Zurich, Switzerland (GenevaLunch) - President Hosni Mubarak of Egypt has benefited from an outpouring of nationalist fervour following the Egyptian soccer team’s loss to Algeria after two qualifying matches 14 and 18 November. The fallout from the football matches has included Egyptians being attacked in Algiers, Algeria, and a rupture in diplomatic ties between the two countries. Mubarak addressed the country’s parliament Saturday 21 November and vowed to protect the dignity of Egyptian citizens living abroad, to loud applause.
The incidents surrounding the arrival of the Algerian football team in Cairo, Egypt 14 November for a World Cup qualifying match with arch-rivals Egypt are to be investigated by the disciplinary committee of the world football regulatory body, Fifa announced 19 November. The bus carrying the Algerian team was beset by rioters and stoned as it moved from the airport to the hotel.
Philipp Hildebrand, SNB
Geneva, Switzerland (GenevaLunch) – The incoming head of the Swiss National Bank, Philipp Hildebrand, says Switzerland needs tighter banking regulations than most countries, due to its size relative to the country’s economy. Total banking assets exceed seven times Switzerland’s GDP, he notes, and they are very concentrated, with the two big banks, Credit Suisse and UBS, having two-thirds of the total.
Recovery may be underway but the costs to the global economy, longer term, loom large. “The potential costs of the support measures taken – capital injection, asset purchases, and guarantees of bank debt – in the G7 countries together with Australia, the Netherlands, Spain and Switzerland amount to about 20 percent of GDP in these economies,” he says, although actual outlays have been about 8 percent.
Hildebrand, who takes over as SNB chairman in January 2010 when Jean-Pierre Roth retires, made his remarks in a speech Wednesday evening 18 November at the University of Geneva.
The SNB is focusing on two areas of bank regulation changes, in line with recommendations drawn up by the Financial Stability Board (FSB) The FSB was created in April 2009 and is housed at the Bank for International Settlements in Basel, Switzerland.
Mixed signals from banks, for US citizens in Switzerland
Updated 01:00 Geneva, Switzerland (GenevaLunch) - Swiss banks have become more cautious in their relations with US citizens in the wake of problems the country’s largest bank, UBS, ran into in 2008 with the IRS over unreported income on the part of some of its clients. GenevaLunch, in a survey of several Lake Geneva area banks, found that without exception the banks say they do not discriminate against US citizens, and they continue to welcome new accounts. Stories nevertheless abound in Switzerland of US citizens who received letters in early 2009 from their banks saying their accounts were being closed – but few of of these people will speak openly about such letters, in part because the IRS tax authority encourages citizens to report on others who are not “compliant” in filing taxes as well as listing all worldwide assets.
US Ambassador Beyer suggests UBS could turn over fewer names
A GenevaLunch reporting team this week spoke with several people to determine the extent to which the personal banking problem is real or a recent urban myth. The team talked to seven of the eight banks which returned its calls and to a number of US citizens resident in Switzerland, as well as with members of American Citizens Abroad (ACA). Some of those interviewed participated in an informal meeting in Geneva 12 November with the new US ambassador to Switzerland, Donald Beyer, where the banking problem was raised.
Beyer later in the day told WRS public radio in Geneva that some 9,000 Americans took advantage of an IRS amnesty for citizens overseas that ended 15 October. He suggested in the radio interview that the number of names UBS will turn over to the IRS is likely to be lower than the numbers – up to 50,000 – tossed about earlier in 2009 by international media.
US citizens in Geneva, Switzerland with Ambassador Donald Beyer, centre back, 12 November 2009
Geneva, Switzerland (GenevaLunch) – A small group of Americans met informally with their new ambassador, Donald Beyer, Thursday 12 November, the first such meeting in Geneva in some 20 years, according to the members of American Citizens Abroad (an international organization based in Geneva) who participated. The discussions were wide-ranging and included:
Eileen Chamberlain Donahoe (image: Cisac, Stanford University)
Update 18:50 Geneva, Switzerland (GenevaLunch) - US President Barack Obama has nominated two more women for key posts in Geneva. Eileen Chamberlain Donahoe is nominated as US ambassador to the UN Human Rights Council in Geneva, as a member of the US Mission to the United Nations. Her name had been circulating earlier in the year as a possible candidate for the post of US Ambassador to the UN in Geneva, and thus head of the US Mission, but Obama 24 October nominated Betty King for that post.
Laura Kennedy has been nominated as US ambassador to the Conference on Disarmament (CoD), as part of the Department of State, but the CoD is based in Geneva. The Conference has 65 member nations, and it famously ended a 12-year stalemate in May 2009 with a new work programme. The new agenda’s priority work is to develop the Fissile Material Cut-off Treaty, which would end production of fissile materials for use in atomic bombs.
The two nominations, as well as that of Betty King, are subject to review by the Senate Foreign Affairs Committee, which then makes recommendations to the full Senate, and it votes on each appointment. The process normally takes two to three months.
Bern and Geneva, Switzerland (GenevaLunch) – Geneva’s Graduate Institute has been officially recognized as an institution of higher learning at the university level, according to the federal state secretariat for education and research (SER). The recognition means that the institute can receive federal subsidies for higher education, and the diplomas granted are officially recognized.
Update 18:20 Bern, Switzerland (GenevaLunch) – Switzerland has submitted a list of 37 sites around the country to the Council of Europe for consideration as sites worthy of special protection for their biodiversity. The Council’s Emerald network of protected sites was set up under the Convention of Bern in 1979, and requires states to protect biodiversity within their borders. Two sites in the lake Geneva region included on the list are Les Grangettes, in canton Vaud between Le Bouveret, canton Valais, and Villeneuve in Vaud, and the Rhone alluvial complex at Geneva, the Federal Office for the Environment has announced.
Ruth Dreifuss, former Swiss president, who grew up in the Secheron district in Geneva, attended a December 2008 presentation on the development of the international Geneva project, near the WTO.
Geneva, Switzerland (GenevaLunch) - The proposed extension to the World Trade Organization’s building at Centre William Rappard will be decided this Sunday 27 September by the city of Geneva’s voters. The vote is a strictly municipal affair, and the outcome is not binding on the canton, which has the final say on city planning decisions. But this vote is being seen as a test of the city’s commitment to the concept of Genève internationale, host to the European headquarters of the UN and to more than 30 specialized UN organizations, as well as to a large number of non-governemental organizations (NGOs).
A strong “no” vote by the citizens of Geneva would seriously weaken that commitment. Pierre Vanek, leader of the project’s opponents, points out in an interview published in Le Temps that the canton can ignore the result of a refusal, but “people wouldn’t understand why it was going against a popular vote.”
The cantonal authorities approved the building extension because the WTO urgently needs the extra space.
We're all connected: Swiss economic health depends on the world, says SNB
Zurich, Switzerland (GenevaLUnch) - The Swiss National Bank’s (SNB) is guardedly more optimistic than in June about the outlook for the Swiss economy, it said Thursday afternoon 17 September in its quarterly report, but monetary policy will remain loose in order to stimulate the economy. The central bank revised its GDP (gross domestic product) forecast, saying it expects this to fall by between 1.5 and 2 percent, less steeply than forecast in June (2.5 to 3 percent). The key interest rate range remains unchanged at 0.0-0.75, “still aiming to keep the Libor within the lower end of this range, that is, at approximately 0.25%.” The Libor serves as an indicator of shifts in bank lending rates.
The SNB says it will continue to intervene in currency markets to keep the Swiss franc competitive internationally.
Bern, Switzerland (GenevaLunch) – Bank deposits in Switzerland up to CHF100,000 will be covered in case the bank gets into trouble, and depositors should be paid within 20 days. The Swiss government proposal foresees a two-tier system: a public guarantee fund with CHF9.75 billion to be funded by the banks in the first tier. Then, should the fund be exhausted, the Swiss government will either pay out the necessary funds or guarantee the difference. In either case, banks will pay a yearly premium towards the additional funding.
The funds could also be used under certain circumstances to ensure essential business continuity for a troubled bank, according to the Swiss Federal Department of Finance (FDF) 14 September.
The current law covering deposits expires in 2010. It was a stop-gap measure introduced in late 2008 because of the banking crisis. The government proposal would make the guarantee permanent. It now goes through the consultative process until 31 December 2009.
See also: part 2 – Taxes overboard! Americans reconsider the IRS at the Geneva T party
and part 1: US-Swiss treaty details may not come in time to help US citizens abroad
[Update 3, 21 September: note that the IRS has announced it will delay the deadline to 15 October 2009, from 23 September - details here; correction added to point 5 below] Geneva, Switzerland (GenevaLunch) – US citizens and greencard holders living outside the US should be aware of new tax rules, but also new enforcement procedures, according to several groups and tax experts who organized a taxpayers’ information evening 2 September in Geneva: American Citizens Abroad, Democrats Abroad and Republicans abroad. Many US taxpayers living in Switzerland and elsewhere have only gradually become aware during 2009 that the IRS (US tax authority) has imposed new rules, a six-month amnesty that ends 23 September and it is taking a tougher stance with “non-compliant” taxpayers. Rumours have been thick on the ground, but hard facts few.
See also: part 2 – Taxes overboard! Americans reconsider the IRS at the Geneva T party
part 3 – What has changed for US taxpayers living abroad
[Update 3, 21 September: note that the IRS has announced it will delay the deadline to 15 October 2009, from 23 September - details here]
Geneva, Switzerland (GenevaLunch) - The Swiss government announced Friday 11 September that it is authorizing its finance and foreign affairs ministries to sign a new double taxation agreement with the US to replace the current one, which dates back to 1996. The step may ease nervousness among some Americans in Switzerland and elsewhere outside the US – as long as it means that details of the new treaty are published soon.
A Swiss government spokesperson told GenevaLunch 11 September that it’s impossible to know when the two Swiss departments will actually sign the treaty. Parliament retains the right to vote on it, as well, once the departments sign, and as yet there is no clear indication if parliament will or will not exercise this right.
Some US citizens and greencard holders who live overseas know that they are considered non-compliant under IRS (US tax authority) rules which are being more stringently enforced in 2009, and they are debating coming in from the cold. Others are only becoming aware they may not be fulfilling their US tax obligations, even though they assumed they were.
; ?>/images/transportation_strip.png){kind=spacer}