A New Attempt For A Swiss Substantive Trust Law
In the past, attempts made to codify the Trust under Swiss law have not been crowned with success. The Federal Council has rejected several parliamentary attempts since 2001. The clear assumption of "Postulate Merlini " by the National Council in February of this year and the parliamentary initiative "Regazzi " may now change the circumstances here.
The world of trusts has changed since the Anglo-Saxon trust became embedded in the Swiss legal system in 2007 following ratification of The Hague Convention. Most of the arguments and reservations raised until that point no longer apply today.
The Financial Institutions Law (FINLAW)
Soon, in addition to the Anti-Money Laundering Act (AMLA), the Financial Institutions Law will subject Swiss trustees to meticulous monitoring and the duty to obtain a license. The purpose of these steps is to ensure that trusts can no longer be misused for undesirable purposes Switzerland. Trusts are a reality in Switzerland, and the FINLAW now takes this into account. Thus, a law governing Swiss trusts can only be the logical conclusion to this.
Automatic Exchange of Information (AEOI)
According to OECD guidelines, the automatic exchange of information results in transparency across borders. This makes using trusts in "secret" impossible. To-date, asset structures like trusts and their use have often been presented from a one- sided point of view in the media. Thus far, this has led to the impression that trusts as a legal form are primarily used for improper purposes. However, the present and especially the future look different owing to the AEOI and the up-and-coming regulation of Swiss trustees taking effect.
The reputation of Switzerland as a financial centre
The ongoing implication of Switzerland as a financial centre manifested in the form of leaks and other scandals happening abroad strengthens the desire for control and to irrevocably put an end to old practices. However, this will only succeed if legal structures like trusts are made available from within Switzerland. In the absence of such solutions, it is necessary to establish structures abroad. Dealing with foreign legal forms is, of course, much more difficult, and it is almost impossible to enforce effective oversight outside of Swiss territory. Yet, nearly a quarter of the assets that are deposited with Swiss banks are held in the name of trusts and other legal structures. This should be reason enough to pay additional attention to trusts and other...
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