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.
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.”
GENEVA, SWITZERLAND – A 32-year-old British man who lives in the UK, whose identity has not been released by canton Valais police, died during the night of Wednesday-Thursday 11-12 April, after falling from a third-floor balcony in Verbier.
The man’s body was found at 08:20 Thursday at the foot of the building by a passerby, who contacted police. The circumstances surrounding his fall are unclear, police say. An investigation has been opened and an autopsy ordered.
GENEVA, SWITZERLAND – Thirty years ago today, 2 April 1982, the Falklands War began, when the UK sent troops to rebuff what the British refer to as an invasion of the island they have ruled since 1833. Argentina sees it differently and despite defeat at the hands of the British 30 years ago, the South American nation is renewing its claims to the island it calls Malvinas. The anniversary in both countries is being observed by paying tribute to the 225 British and 650 Argentinian soldiers who died during the war, which lasted 74 days.
In the US, files from the period that are now available to the public for the first time, show President Ronald Reagan quietly backing the UK while publicly the US acted as a supposedly neutral negotiator.
Links to other sites: BBC, Buenos Aires Herald, George Washington University National Security Archives
Related tax news: Upper house commission backs government’s proposed fiscal administrative assistance process
BERN, SWITZERLAND – The United Kingdom and Switzerland signed a Protocol of Amendment to their new double taxation treaty Tuesday 20 March, with the Swiss government noting that “The agreement remains unchanged in essence” and that “the concerns of the EU Commission regarding compatibility with EU law have been removed.” The agreement was initialed 6 October 2011 and followed a new treaty between the two countries that entered into force in January 2011.
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.
Switzerland, in a statement Tuesday notes that “Effectively, nothing will change for bank clients; their tax obligations will be fulfilled. Only the legal structure will change.”
Key points of the final version include:
- Interest payments will be excluded from the agreement; “at the same time, it will be ensured that UK taxpayers can discharge their tax liability on interest payments”
- Inheritance is now also covered by the agreement in order to eliminate a loophole. In the case of inheritance, the heirs must consent to either collection of a tax or disclosure.
The agreement is now ready for the two countries’ parliaments, which must approve it before the agreement enters into force in 2013.
The economic commission of the upper house of parliament agreed Tuesday to back the Federal Council’s revised process in case of requests from foreign goverments for fiscal administrative assistance, also adapted as a result of OECD criticism of Swiss agreements with other countries. Revised procedure, fiscal administrative assistance (Fre), pdf
GENEVA, SWITZERLAND – The UK budget, to be unveiled Wednesday 21 March, could well hold some surprises, but one of its most unusual features is already under discussion: a partial privatization plan that would allow wealth funds from sovereign states to lease British motorways and highways. The Guardian reports that “In his most eye-catching proposal, [Prime Minister David] Cameron will announce that the Treasury and Department for Transport are to carry out a feasibility study looking at using private-sector funds to improve and maintain trunk roads and motorways.”
China is one of the targeted countries, but any funds investing in the roads programme would need to meet a set of targets to improve roads and reduce congestion, areas where the government says Britain is falling behind.
Chancellor of the Exchequer George Osborne, reports the Wall St Journla, says that “the bulk of the measures in the budget will be aimed at helping low and middle income earners, in a move that is likely to appease junior coalition partners the Liberal Democrats and offset speculation about a controversial cut to the top income tax rate.”
Links to other sites: Guardian, Independent, Wall St Journal
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
GENEVA, SWITZERLAND – You won’t yet find this news in The Sun, but five more senior journalists were arrested in an early hours raid Saturday 11 February at their homes in London, Essex and Kent, two weeks after four others were arrested. The total number of those taken in by police as part of Scotland Yard’s Elveden investigation into corruption, including journalists bribing police officers.
Today’s arrests pulled in deputy editor Geoff Webster, picture editor John Edwards, chief reporter John Kay, chief foreign correspondent Nick Parker and deputy news editor John Sturgis, according to Sun owner News Corp. The five arrested earlier were all released on bail.
Owner Ruport Murdoch says the newspaper will continue to publish, unlike its sister tabloid News of the World, forced to close in the summer of 2011.
Links to other sites: BBC, Guardian, Scotland Yard, The Sun
GENEVA, SWITZERLAND – The London Wapping offices of News Corp, owner of British tabloid The Sun, were raided by Scotland Yard police early Saturday 28 January and during the morning Saturday four journalists and a police officer were arrested. The journalists are all current or former Sun journalists. The Metropolitan Police issued a statement that “Today’s operation is the result of information provided to police by News Corporation’s Management and Standards Committee. It relates to suspected payments to police officers and is not about seeking journalists to reveal confidential sources in relation to information that has been obtained legitimately.”
The raid and arrests are part of an investigation dubbed Elveden into police corruption that involves The Sun possibly paying police for news information.
Links to other sites: Financial Times, Guardian, Reuters
GENEVA, SWITZERLAND – The Financial Times wondered Sunday if the UK will drop out of the European Union, but most media weren’t willing to take it quite that far. Europe was nevertheless adjusting this weekend to a new set of relations after Britain vetoed a new EU treaty that would bind the members more closely financially. The UK was the only one of the 27 member countries to do so. UK Prime Minister David Cameron goes before parliament Monday 12 December to explain why he vetoed the treaty. He said after last week’s vote that it left the financial services industry unprotected.
Ireland has said it will start bilateral talks with London soon, with the Irish Times reporting that “The Government intends to launch an intensive diplomatic engagement with Britain to ensure London is not left isolated as a result of its refusal to agree strict new fiscal rules in the European Union.”
Links to other sites: Guardian, Irish Times, Le Monde interview with Nicolas Sarkozy (Fr), Telegraph
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.
GENEVALUNCH – The most comprehensive study ever of the source of cancers in Britain according to its authors shows that smoking, drinking, poor eating habits and excess weight trigger 43 percent of cancers in the country and are responsible for half of all cancer-related deaths.
The study is published today in the British Journal of Cancer and is receiving considerable media attention in the UK.
The biggest lifestyle changes men should make, the report suggests, is to eat more fruits and vegetables and to smoke less. Women should keep their weight down.
The authors, in their introduction to the special supplement to the regular journal say the results show “a limited number of important factors that can, at least to some extent, be affected by personal or political choices. The most important among these is continuation of the significant reduction in tobacco exposure. Next in importance are reductions in obesity and in heavy alcohol consumption, and certain other dietary changes. Each of these four main strategies for cancer control would also substantially reduce the burden of other non-communicable diseases, particularly cardiovascular, diabetic, renal and hepatic disease.”
The UK had 134,000 new cases of cancer diagnosed in 2010. Tobacco alone is responsible for about 20 percent of all cancers and 25 percent of cancer-related deaths.
“Over the past 40 years in the UK, the probability of death before the age of 70 years has been halved, and over the next few decades it could be halved again by continued improvements in the treatment of disease and by paying appropriate attention to the few major avoidable causes of disease.
Customer approval up as on-time arrivals rise by 13% in year
Easyjet comes into Geneva near the Saleve; it remains Geneva's busiest carrier
GENEVA, SWITZERLAND – Easyjet ended its year 30 September with a good year in Switzerland and overall customer approval up strongly, in large part because of a 13 percent increase in on-time arrivals.
The company also announced when it issued its financial report covering the period, published in mid-November, that it will begin trialling assigned seating in Spring 2012, as part of its push to increase customer approval ratings.
It has not provided details about the routes or flights or how the new seating system will work.
Passenger numbers for the company as a whole rose nearly 12 percent, and 56 percent of customers are now outside the United Kingdom.
On-time arrivals rose from 66 percent at the end of September 2010 to 79 percent on average for the following 12 months, but Q4, which ended 30 September, showed an 85 percent on-time rate.
The company carried 7.7 million passengers in Switzerland, it told Swiss news agency ATS, almost exactly the same number as the population of Switzerland, during the period.
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.
GENEVA, SWITZERLAND – Britain has reacted sharply to the attack on its embassy in the Iranian capital of Iran Tuesday 29 November, by an angry crowd that police were unable to control. The embassy compound was over-run, including diplomats homes and offices. An emergency meeting of the UK government was called to deal with one of the worst diplomatic crises in recent years between Iran and Britain. The Guardian describes the scene: “The crowd ripped the gilded UK crest off the embassy, pulled down the union flag and replaced it with the Iranian one, and threw satellite dishes off the roofs of embassy buildings. They also smashed windows and scattered thousands of papers in the street in front of the embassy, where British, US and Israeli flags were set alight.”
Aljazeera reports that the crowd was mainly students who called the British Embassy a spy hideout for the US.
The Ottawa Citizen, with reports from the Telegraph and Reuters, writes “Chanting “death to England”, the protesters – many of them organized by a student branch of the pro-regime Basiji militia – burned the British flag and set a car on fire in protest at sanctions imposed last week on Iran’s banking system.”
The situation was under control by 18:00 Tuesday and the UK government says all staff have been accounted for; there were no injuries.
Video, Aljazeera
UK strike could cause flight delays: check with your airline
GENEVA / ZURICH, SWITZERLAND – A public sector strike in Britain Wednesday 30 November is expected to cause slowdowns at border crossings, including airports, Prime Minister David Cameron confirmed. The impact on Geneva and Zurich airports is not yet clear, with BA and Swiss flights on schedule early in the morning, but passengers should check for updates on airlines’ sites:
Architect's drawing of Nestle's new water factory in the UK
VEVEY, SWITZERLAND – Nestlé has its eyes on Britain this week, announcing that it will create 300 new jobs and invest £110 million at its Dolce Gusto factory in Tutbury in Derbyshire, UK. The company is planning to triple its coffee capsule production there, adding 12 new production lines.
The move is the latest in what the company refers to as a series of multi-million pound investments it has made recently in the UK, including: £200 million to transform its confectionery factory in York, £40 million to create “a European centre of excellence for Nescafé Cappuccino in Cumbria”, and this week’s announced construction of a £35 million water bottling factory in Buxton.
The new bottling lines at the Buxton plant “will significantly reduce the site’s total energy output, as well as producing the lightest weight bottled water bottles made in the UK. The innovative new bottle design will use an average of 25 per cent less Pet plastic than the current design, and will be used across the entire still range of Buxton Natural Mineral Water and Nestlé Pure Life” products, the company says. It notes that demand for its bottled water lines has had double-digit growth over the past three years.
The new site will allow Nestlé Waters to decrease the amount of water used in its manufacturing and by the end of 2012 the site aims to be certified zero waste to landfill. Other green measures linked to the site: working with the local community through its “on-the-go recycling programme” and with students who planted a butterfly wildflower meadow as part of a larger site biodiversity plan.
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.”
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.
GENEVA, SWITZERLAND – A 27-vehicle pileup on the M5 motorway in Somerset, England, has killed an unknown number of people but initial reports list 5 dead, at least 43 injured. The accident occurred at 20:35 Friday 4 November at exit 25 northbound, near Taunton, with the crashes sparking a huge fireball. It appears that six trucks and at least 20 cars were involved in the huge crash.
Heavy rain earlier in the day Friday and patches of fog may have been involved in causing the accident, but police investigations have not yet clarified what caused the huge fireball.
GENEVA, SWITZERLAND – Iran Friday 4 November suggested the US is setting the countries on a collision course, as the US and Britain “advance contingency plans”, according to the Guardian, for an attack on Iran, should new fighting break out in the Middle East. Tensions are rising in the US and the UK over Iran’s latest nuclear buildup at a time when Syria is taking a hard line against protesters, while Israeli leaders are talking about a possible attack on Iran. The news dominates some European and Israeli media, but is hardly making waves in the US.
Links to other sources: Guardian, Jerusalem Post
Euronews video
GENEVA, SWITZERLAND – A report published Monday 31 Octcober by Ucas, the British university admissions board, shows that wealthy students are favoured, reports the Guardian. Ucas is currently reviewing the university admissions process with an eye to reform sometime after this year’s secondary school final year students complete their high school studies.
The Guardian says that Ucas’s review to date shows that the system favours students in private schools or those from schools with tutors who know the application process. Ucas’s reforms could be the most significant in 50 years, argues the newspaper, starting with a fundamental shift in the application process. “It [Ucas] argues that teenagers should no longer apply to university with predictions of what they will achieve in their A-levels, but instead only submit their applications once they have their final grades.”
GENEVA, SWITZERLAND – A journalist who works for the Observer and the Guardian has written a plea for police to stop trying to obtain information from his cell phone, amid a continuing row over journalists, their sources and the right of the police to obtain media images.
Henry McDonald, who covers Ireland, including Northern Ireland, for the media companies, was asked by police to hand over his cell phone following calls last weekend linked to possible violence in the north. He has been told by his management not to hand over the phone but the affair has reignited an old debate over police rights to information held by journalists. The incident follows earlier ones in August 2011 where police demanded film footage of riots in London.
GENEVA, SWITZERLAND – Iceland’s president, Ólafur Ragnar Grímsson, is making waves by saying Europe bullied the country into bailing out Icesave bank, which had large numbers of UK and Dutch investors, a bailout that was hugely unpopular at home, while the US was “absent” and India and China were helpful as the country faced serious debt problems. His remarks were initially made at the end of last week in an interview with the Financial Times following news that Iceland’s government has agreed to allow a Chinese investor to buy a large chunk of the island for an eco-tourism resort. He then repeated his remarks during a key radio broadcast Sunday, and he is asking the European Union to investigate the role of the UK and The Netherlands in the bank bailout.
The IMF has been involved in helping sort out the country’s debt problems and Iceland is eyeing European Union membership.
Links to other sites: China Post, The Financial Express, VOA blog
Tourists meet the local cows, hiking down from the Jungfraujoch
BERN, SWITZERLAND – July 2011 was not the disaster for Swiss tourism that some people expected, given the high Swiss franc, but European visitors’ overnight stays were down by 3.5 percent compared to July 2010, with foreigners’ overnight stays down 4 percent.
Two of Switzerland’s traditionally largest groups of European visitors, Germans and the British, were down 11.6 and 10.5 percent respectively.
The Swiss Statistical Office attributes the drop to the combination of a very high franc and unusually cold, wet weather for mid-summer.
Chinese (without Hong Kong) tourists, while still a small part of the overall number, had a positive impact with a 61 percent increase, to 76,787 overnight stays. Germans had 527,612, the largest group.
For the first six months of the year, Chinese visitors’ overnight stays rose 42.5 percent, faster than Indian visitors’, which increased by more than 25 percent, and the Chinese are now not far behind Indians as a key tourist group.
BERN, SWITZERLAND – Switzerland and the UK initialled, as expected, a tax agreement Wednesday 24 August, under which the Swiss will collect a withholding tax in future, and transfer the money to the UK government. The agreement echoes the one drawn up between Switzerland and Germany, initialed 10 August 2011, which allows Swiss banking secrecy and privacy laws to be respected while the other governments are able to collect tax revenues.
“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,” the Swiss statement on the agreement says.
The agreement contains special rules for non-UK domiciled individuals: persons living in the UK who do not have their permanent home there.
Swiss banks will pay a CHF500 million guarantee, to ensure UK tax authorities “a minimum income from the retrospective taxation of existing banking relationships as well as to state their resolve to implement the agreement”. “The funds advanced by the banks will be offset by the incoming tax payments and refunded to the banks.”
Capital gains of British clients subject to withholding tax
BERN, SWITZERLAND – Swiss officials, like those in the European Union, say they must wait for a new United Nations resolution before allowing financial institutions to release frozen assets of Libyan dictator Muammar Qaddafi and his entourage, but several countries are meeting in Doha today, 24 August, to discuss an emergency request for $2.5 from Libya’s National Transitional Council.
The UN Security Council’s resolution in early 2011 to block Qaddafi assets led to an estimated $100 billion being frozen, in several countries, according to the Financial Times, which lists the US as the largest holder, at $37b, and the US $12, with Germany holding another $7.3b.
The exact amount frozen in Switzerland has not been confirmed by the Swiss government, but it is likely to be a fraction of the total blocked, possibly less than CHF1 billion, according to earlier figures released by the government. Libya withdrew much of the money it had in Swiss banks and other financial institutions in 2008 after Hannibal Qaddafi, the younger son of Muammar, was arrested at a Geneva hotel for attacking one of his employees.
GENEVA, SWITZERLAND – The spread of London’s riots to more parts of the city and to other cities is the headline news Tuesday 9 August, not just in the UK but in most English-speaking countries, overtaking news of stock markets diving and the continuing fall of the dollar and the euro in currency markets. London’s Met Police are reported to be delivering people who are arrested to jails outside the city because it’s own are filled.
Stock markets:Carlos Slim, the world’s richest man, is calculated by Bloomberg to have lost $6.7 billion in the past week as markets dived amidst gloomy debt and credit rating news in the US and Europe. Wall Street fell more than 6 percent in trading Monday, the first day of trading post-Moody’s credit downgrading, and Asian markets continued their downward spiral Tuesday before easing, with the Swiss franc holding strong ($1.32 and euro.93) in what Reuters describes as “a global rout triggered by fears that political leaders are failing to tackle debt crises in Europe and the United States.” Bloomberg notes that Asian markets responded positively to talk of the US Federal Reserve intervening.
Links to other sites: BBC, Bloomberg, The Globe & Mail, Guardian, Irish Times, Sydney Morning Herald
GENEVA, SWITZERLAND – Tottenham’s night of violence in the north of London, sparked by the death of a man shot by police, spread Sunday to several other London suburbs: Enfield, Walthamstow and Waltham Forest in north London, Brixton to the south, according to the BBC. Police have been the target of much of what the BBC calls the “disorder”, with 35 police officers reported to be wounded, police vehicles overturned and large gangs of youths looting shops, especially mobile phone stores. Some 100 people were arrested.
Links to other sites: BBC, Met Police statement, Sky News, Telegraph
A Chinese TV travel programme film crew shoots preparations for the 1 August national holiday celebrations at a chalet in Valais
Chinese most rapidly growing group of visitors
ZURICH, SWITZERLAND – The Swiss franc has been soaring, but tourists continue to visit Switzerland, the country’s latest tourism figures show.
The first six months of 2011 show a very slight slippage, down 0.2 percent compared to the same period in 2010, with foreign visitors’ overnight stays down 6.9 percent.
The numbers show some surprises, however.
The 7.6 percent drop in the number of overnight stays by Germans, Switzerland’s largest group of tourists, is blamed on the weakness of the euro, but overnight stays by US visitors were up 3.6 percent to more than 700,000 overnight stays despite the increasingly weak dollar.
Germany remains by far the biggest tourism client, with 2.75 million overnight stays from January to end-June, with the UK in second place with 923,000.
Swiss raclette cheese explained, 1 August 2011, to Chinese TV crew
But the number of Chinese tourists (minus Hong Kong) is growing more rapidly than any other group: 221,218 overnights during the first six months of the year, a 39 percent increase. And of the increase of 61,000 overnights, more than 20,000 were in the month of June alone.
China is now the 10th largest source of tourists, close on the heels of India 270,238 overnights during the same period.
China and India are the only non-European countries in the top 10 besides the US.
Virtually all tourism regions in Switzerland saw a slight increase in the first six months of the year, with Graubuenden and Valais as exceptions, but both are big ski destinations and the lack of snow in the latter part of the winter may have had an impact.
Tourism office officials said earlier this year that it generally takes a few months for the impact of exchange rates to show in the figures, since holiday travel is generally booked ahead.
