Since the war in Ukraine began, numerous countries, including Switzerland, have taken measures and imposed sanctions against Russia. The sanctions and measures taken by Switzerland in connection with the war in Ukraine can be found in the Ordinance on Measures in Connection with the Situation in Ukraine (“Ordinance”). These include inter alia asset freezes and a ban on making assets available to sanctioned persons. To ensure that the sanctions can be applied successfully and provide clarifications, the State Secretariat for Economic Affairs (“SECO”) has issued guidance on the Ordinance, which was last updated on 13 June 2024.

1. Who is affected by the sanctions?

Art. 15 (1) of the Ordinance stipulates that funds and economic resources owned or directly or indirectly controlled by certain groups of persons shall be frozen.
This includes persons who:

a) are listed in the Annex to the Ordinance (Annex 8);

b) natural persons, companies and organisations acting on behalf of or on the instructions of the natural persons, companies and organisations referred to in letter a); and

c) companies and organisations that are owned or controlled by the natural persons, companies and organisations referred to in a) or b).

It is noticeable here that not only persons are listed directly are subject to sanctions, but also persons who are owned (e.g. company) or controlled by the sanctioned persons.
For a long time, Switzerland did not issue any definitions or guidance as to when one can speak of ownership of or control over certain persons (including companies). Usually, however, SECO was referring to EU established criteria for ownership and control. This has icreasingly led to legal uncertainty as well as excessive freezing of assets from Swiss banks.
However, it must also be mentioned that the excessive freezes are not only due to legal uncertainty in Switzerland, but also to secondary sanctions, for example from the United Kingdom or the USA.

2. How does the EU define ownership and control in connection with sanctions?

According to Art. 1 §5 of the EU Regulation (EC) N° 2580/2001 of the Council of 27 December 2001, included in Art. 55bis of the Sanction Guidelines of 4 May 2018, ownership of a company by a person is assumed by the EU if the person holds more than 50 % of the ownership rights or a majority shareholding.
As for the control, it can be defined by Art. 1 §6 a-h of the EU Regulation (EC) N° 2580/2001 according to which a person or entity can be considered as exercising control on the basis of the following criteria, namely:

a) the person or entity has the right or power to appoint or remove a majority of the members of the administrative, management or supervisory body of the legal person or entity

b) it has, solely through the exercise of its voting rights, appointed the majority of the members of the administrative, management or supervisory body of the legal entity or organisation for the current and previous financial year; or tion;

c) it alone holds the majority of the voting rights of the shareholders or members of the legal entity or organisation on the basis of an agreement with other shareholders or members of the legal entity or organisation;

d) it has the right to exercise the majority of the voting rights of the shareholders or members of the legal entity or organisation for the current and previous financial year. or members thereof;

e) it has the right to exercise a dominant influence over the legal entity or organisation by virtue of a contract concluded with it or by virtue of a provision laid down in its memorandum or articles of association, provided that the law to which the legal entity or organisation is subject permits it to be subject to such contracts or provisions;

f) it has the power to exercise a dominant influence over the legal entity or organisation by virtue of a contract concluded with it or by virtue of a provision laid down in its memorandum or articles of association. to such contracts or provisions;

g) it shall have the power to exercise the right to exercise a dominant influence within the meaning of point (d) without itself being subject to that right; it shall have the right to exercise the right to exercise a dominant influence within the meaning of point (d) without itself being subject to that right. right itself;

h) it has the right to use all or part of the assets of the legal person or organisation; it manages the business of the legal person or organisation;

i) it manages the business of the legal entity or organisation on a uniform basis with the preparation of consolidated financial statements.

Also, the several criteria identified by the European Commission in its Opinion of 19 June 2020 on Article 2 of EU Regulation N° 269/2014 should be considered to determine whether a legal entity is controlled by another entity, whether the latter “is able to and effectively asserts a decisive influence over the conduct of the other entity in question”, e.g.:
the power to appoint or remove a majority of the members of the administrative, management or supervisory body of such legal person or entity;
the fact of using all or part of the assets of a legal person or entity;
the fact of sharing jointly and severally the financial liabilities of a legal person or entity, or guaranteeing them;
the fact of having influence as regards corporate strategy, operational policy, business plans, investment, capacity, provision of finance, human resources and legal matters;
the fact of putting in place or maintaining mechanisms to monitor the commercial conduct of the legal person or entity;
other indications such as sharing a business address or using the same name which could cause third parties to have the impression that the two entities are in fact part of the same undertaking.

3. How should the concept of ownership of companies be interpreted in Switzerland?

According to the newly released interpretation guidance, SECO has stated that ownership of a company exists if a natural or legal person holds more than 50 % of the ownership rights in a company. Ownership rights held by several sanctioned natural persons, companies or organizations are generally aggregated. Finally, it should be noted that not only direct ownership is covered, but also indirect ownership.

4. How is the concept of control over a company to be interpreted in Switzerland?

The interpretation of the concept of control of a company or organisation is more multifaceted than that of ownership. Firstly, it should be noted that control can be exercised by a natural person or a legal entity. However, control can also come about through an organisation or agreement between several shareholders or third parties.
The criteria, when a person has control over a company, were not exhaustively listed by SECO:

• Control over the Board of Directors by being able to de facto or formally appoint or dismiss it;

• There is a formal or de facto majority of voting rights in the company;

• A controlling influence is exercised over the company on the basis of a contract/deed/statutes; the person does not have to hold the right themselves, but can also exercise this through a third party;

• The person exercising control can control some or even all of the funds, for example by being able to earmark them for a specific purpose;

• The business of the company is managed by the person;

• The person is liable or guarantees for the financial liabilities of the company;

• The person has influence over the management of the company via a loan that the person has given to the company.

Only one of the criteria listed above must be met in order to be able to speak of control of the company by the relevant person/majority of persons.

5. What are the criteria for controlling in financial transactions?

If there is a well-founded suspicion at the time of the assessment that funds or economic resources have been officially transferred to third parties but the sanctioned person, company or organization still retains control over them, these funds or economic resources must be frozen. In these constellations of transfers of value to third parties, SECO has applied further criteria for the assessment:

• The close relationship (e.g. familial) between the sanctioned transferring person and the third party;

• The economic/professional independence of the third party from the transferring sanctioned person;

• The frequency of the benefit after the person was sanctioned compared to before;

• Agreements between the receiving third party and the transferring third party regarding the transfer of funds;

• Compliance with the arm’s length principle (according to this principle, transactions must take place under the same conditions as if they had been agreed between unrelated third parties in free competition under similar circumstances).

The relevant time of the value transfer may also have occurred before the implementation of the sanctions.

Concluding remarks

In updating its guideline on the interpretation of sanctions, SECO has kept very close to the EU’s existing interpretation of the terms. This is by no means a disadvantage, as on the one hand the proximity to the EU can ensure uniform implementation of the law and on the other hand Switzerland has finally achieved greater legal certainty with regard to the criteria for ownership and control. As a result of this update, it is to be expected that cases in connection with the freezing of assets can now be processed more clearly and, above all, more uniformly (also in relation to foreign countries), which can only benefit Switzerland as a financial centre.

If you would like to find out more about this topic or would like to request consultation, please contact us!

Banking retrocessions raise legal and ethical questions. This article provides a legal analysis of retrocessions paid by banks to wealth managers, focusing solely on the restitution obligations defined by Art. 400(1) of the Swiss Code of Obligations (CO) from a wealth manager towards its client.

The underlying idea of this provision is that the agent, apart from receiving their fees, should neither gain nor suffer loss from the execution of the mandate.[1]

1. Art. 400(1) CO Establishing the Principle

Under Art. 400(1) CO, the agent is obliged, at the request of the principal, to provide an account of their activities at any time and to return everything they have received in connection with their mandate, regardless of the title under which it was received.

The obligation to provide an account (Rechenschaftsablegung; obligation de reddition de compte) enables the principal to monitor the agent’s activities. It forms the basis of the restitution obligation and is limited by the principles of good faith.[2]

The duty to provide an account, like the duty to restitute (Herausgabepflicht; devoir de restitution), aims to ensure the agent’s diligence and loyalty obligations (Art. 398(2) CO) and to safeguard the principal’s interests by preventing any risk of conflict of interest for the agent, ensuring that the agent does not prioritize their own or third-party interests over the principal’s.[3]

This obligation is justified by the fact that the agent’s activities should neither cost them anything nor enrich them beyond the agreed fees with the principal.[4]

The principle that the agent should neither be impoverished nor enriched by the mandate, and the goal of preventing conflicts of interest inherent in the restitution obligation, are decisive factors in determining whether the financial advantage received by the agent from a third party is indirectly related to the execution of the mandate and must be restituted, or whether it was merely coincidentally received during the mandate without intrinsic relation to it and thus need not be restituted.[5]

In the presence of third-party allocations, an intrinsic relationship must be assumed if there is a risk that the agent might not sufficiently consider the principal’s interests due to these allocations; it is not necessary for the agent to actually act contrary to their obligations or for the principal to suffer damage.[6]

2. The Legal Framework of Retrocessions

The Federal Tribunal defines banking retrocessions as the processes by which a bank, based on a corresponding agreement, retrocedes a portion of a commission received from a client to a third party.[7]

The restitution obligation of Art. 400(1) CO covers not only what the agent has received from the principal or created themselves but also what they have received from third parties. Indirect benefits the agent must return include discounts, commissions, kickbacks, rebates, or retrocessions.[8]

Retrocessions, which are paid to the agent because they perform or induce certain management actions within the scope of the mandate, are intrinsically linked to the management and fall under the restitution obligation of Art. 400(1) CO.[9]

Swiss case law emphasizes the importance of transparency regarding retrocessions. Agents must not only disclose these payments but also, in the absence of an explicit waiver agreement from the principal, return them.[10]

3. An Informed Waiver

Art. 400(1) CO is a dispositive legal basis. Therefore, the principal can waive its right to receive the retrocessions paid to the agent. However, such a waiver is only valid if the principal has received comprehensive and truthful information about the expected retrocessions and if their willingness to waive restitution is explicitly stated in the agreement with the agent.[11]

In the context of an anticipated waiver, it is impossible to provide exact figures because the total managed wealth constantly changes, and the exact number or volume of transactions to be carried out is unknown at the time of the waiver.[12]

Therefore, for an anticipated waiver of restitution to be valid, it is not sufficient for the agent to provide a mere estimate;[13] the principal must be fully informed of the details and implications of these payments. This means the principal must know the parameters that allow calculating the total amount of retrocessions and enable a comparison with the agreed fees for wealth management.[14] This legal framework reinforces the principle that the agent should not derive undue profit from the mandate relationship.

For the principal to grasp the extent of expected retrocessions and compare them with the agreed management fees, they must at least know the key values of the retrocession agreements with third parties and the range of expected returns. This requirement is met in an anticipated waiver if the amount of expected retrocessions is indicated within a specific range, as a percentage of the managed wealth. Relating these two elements allows the principal to understand, for the purpose of waiving, the total costs of wealth management and recognize potential conflicts of interest for the wealth manager due to incentive structures.[15]

In other words, the principal who waives must compare how much these retrocessions amount to concerning the agreed wealth management fees, to know ultimately how much their agent receives.[16]

In this regard, it is insufficient that the principal had online access to their accounts if the IT system did not allow them to understand how commissions debited from the account were distributed among different participants in trading operations.[17]

The waiver agreement must be explicit and based on a comprehensive understanding of the financial consequences for the principal. Indeed, the burden falls on the agent who wishes to oppose the principal’s waiver of retrocessions to prove that the principal had sufficient information to make an informed waiver.[18] According to some legal scholars,[19] a pre-formulated clause in general terms would hardly meet this aspect. For the waiver to be valid, the bank should instead have the client sign a separate agreement on this point.[20]

This level of transparency is essential to ensure informed consent. This legal requirement emphasises the necessity of transparent and conscientious management of clients’ entrusted funds.

4. Recipient of the Obligation under Art. 400(1) CO

As previously mentioned, the action for an account primarily aims to allow the principal to monitor the agent’s activities. It should be noted that the Federal Tribunal considers information on potential retrocessions paid, as well as the declaration attesting to their completeness, as irrelevant for verifying the agent’s execution of the principal’s instructions.[21] While there is a duty to disclose information about retrocessions, this duty applies to the agent who receives funds from third parties indirectly in the performance of the mandate and must therefore return them, [22] and not to the one who pays them.

For this reason, in the case of retrocessions paid by the bank to a third party, the obligation of disclosure of information lies with the third party who received the retrocessions that the bank’s client must turn, not towards the bank that paid them (at least if there is a direct relationship between this third party and the client that would allow them to request this information)[23] to obtain information regarding the payment of these retrocessions.

5. Statute of Limitation of Retrocessions Related Claims

According to Art. 127 CO, all retrocession related claims are subject to a ten-year statute of limitation unless otherwise provided by federal civil law. Under Art. 128(1) CO, claims related to rents, annuities, interest on capital, and other periodic payments are subject to a five-year limitation period.
Case law holds that periodic payments are obligations that the debtor must fulfill at regular intervals under the same legal relationship.[24] This involves a duration-based relationship, from which periodic obligations arise, which are newly and independently created over time.[25]
However, retrocessions do not result from a duration-based relationship because they are not pre-agreed between the principal and the agent. The agent’s duty to account for these indirect benefits obtained from third parties and the corresponding claims of the principal for these benefits do not rest on a duration-based relationship but on the mere fact that the agent received these benefits.[26] Each duty of restitution thus rests on a separate basis. As a result, retrocessions do not fall under the scope of periodic payments of Art. 128(1) CO.[27] Therefore, the claims related to obligations to restitute retrocessions are subject to the general rule of Art. 127 CO.
Under Art. 130(1) CO, the limitation period begins as soon as the claim becomes due. The due date, when the creditor can claim their debt from the debtor, occurs immediately upon the claim’s creation, unless a term has been stipulated or results from the nature of the matter (Art. 75 CO). The limitation period starts for each restitution claim on the day the agent received the amount to be retroceded.[28]

Concluding remarks

In conclusion, the obligation to provide an account enables the principal to monitor the agent’s activities. Swiss case law emphasizes transparency regarding retrocessions, which agents must disclose and return unless explicitly waived by the principal.

According to Art. 400(1) CO, any waiver must be based on comprehensive and truthful information provided to the principal, with the waiver explicitly stated in the agreement. The principal must understand the extent of expected retrocessions, often indicated as a percentage of managed wealth, to compare them with agreed management fees.

The duty to disclose retrocessions applies to the agent receiving funds from third parties and not to the payer.

Claims related to the restitution of retrocessions fall under the general rule of Art. 127 CO, with a 10-year limitation period starting from the day on which the agent receives the amount to be retroceded.

Finally, the issue of banking retrocessions, although an established practice in wealth management, requires particular attention regarding legal compliance and professional ethics. Art. 400(1) CO plays a crucial role by imposing strict standards of transparency and restitution, which are fundamental for protecting clients’ interests.

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[1] DFT 143 III 348, rec. 5.1.1.

[2] DFT 139 III 49, rec. 4.1.2.

[3] Decision of the Federal Tribunal 4A_266/2010 of 29 August 2011, rec. 2.3.

[4] DFT 138 III 755, rec. 4.2; Decision of the Federal Tribunal 4C.125/2002 of 27 September 2002, rec. 3.1.

[5] DFT 138 III 755, rec. 5.3.

[6] DFT 138 III 755, rec. 5.3.

[7] DFT 132 III 460, rec. 4, in JdT 2008 I p. 58.

[8] WERRO Franz, Le droit des contrats, Jurisprudence fédérale choisie et annotée, 2e éd., Berne 2019, p. 301.

[9] DFT 138 III 755, rec. 4.2; DFT 132 III 460, rec. 4.1.

[10] Decision of the Federal Tribunal 4A_355/2019 of 13 May 2020, rec. 3.1.

[11] DFT 137 III 393, rec. 2.2, p. 396; 132 III 460, rec. 4.2, p. 465 ff. and the references cited.

[12] Decision of the Civil Chamber of the Geneva Court of Justice ACJC/341/2021 of 16 March 2021, rec. 2.1.1.

[13] DFT 132 III 460, rec. 4.1, in JdT 2008 I 53.

[14] DFT 137 III 393, rec. 2.4, p. 399.

[15] DFT 137 III 393, rec. 2.4, p. 399.

[16] Decision of the Federal Tribunal 4A_355/2019 of 13 May 2020, rec. 3.1.

[17] Decision of the Civil Chamber of the Geneva Court of Justice ACJC/341/2021 of 16 March 2021, rec. 2.1.1.

[18] DFT 137 III 393, rec. 2.5, in JdT 2012 II 168.

[19] BASTIAN Enzo, La restitution de rétrocessions en cas de rapport execution only, Bulletin CEDIDAC n° 93.

[20] BASTIAN Enzo, La restitution de rétrocessions en cas de rapport execution only, Bulletin CEDIDAC n° 93.

[21] Decision of the Federal Tribunal 4A_436/2020 of 28 April 2022, rec. 7.5.2.

[22] DFT 137 III 393, rec. 2.1 et 2.5.

[23] Decision of the Federal Tribunal 4A_436/2020 of 28 April 2022, rec. 7.5.2.

[24] DFT 139 III 263, rec. 1.1; DFT 124 III 370, rec. 3c.

[25] DFT 143 III 348, rec. 5.2.1.

[26] GAUCH Peter, Periodisch geschuldete Leistungen: Gedanken zur Verjährungsbestimmung des Art. 128 Ziff. 1 OR, PJA 3/2014, p. 291.

[27] GAUCH Peter, Periodisch geschuldete Leistungen: Gedanken zur Verjährungsbestimmung des Art. 128 Ziff. 1 OR, PJA 3/2014, p. 291; TERCIER ET AL., Les contrats spéciaux, 5e éd. 2016, n. 4495 p. 641/642.

[28] DFT 143 III 348, rec. 5.3.

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1. Instância Dupla

Geralmente, o princípio de que dois tribunais cantonais devem preceder o Tribunal Federal também se aplica ao direito penal. O princípio mencionado foi amplamente mantido na revisão do CrimPC, exceto para decisões sobre medidas coercitivas e ordens para selar evidências potenciais, que só podem ser apeladas diretamente ao Tribunal Federal.

2. Gravação de interrogatórios com auxílios técnicos

Interrogatórios conduzidos por videoconferência eram permitidos antes da revisão. No entanto, sob o novo Art. 78a CrimPC, se um interrogatório for gravado usando meios técnicos, manter atas exatas não é mais necessário. Um protocolo ainda deve ser preparado retrospectivamente (geralmente dentro de sete dias). Portanto, se um interrogatório ocorrer por videoconferência, não é necessário ler o protocolo para a pessoa interrogada. Além disso, a pessoa interrogada não é obrigada a assinar o protocolo. Essa simplificação se aplica não apenas aos interrogatórios conduzidos pelo tribunal criminal, mas também aos do Ministério Público e da polícia.

3. Quantificação e Comprovação da Ação Civil

Sob a lei anterior, os requerentes civis privados podiam quantificar e comprovar suas reivindicações civis na fase de declaração da parte durante a audiência principal. O Art. 123(2) CrimPC revisado agora exige que os requerentes civis privados quantifiquem e comprovem suas reivindicações civis dentro do mesmo prazo estabelecido pelos tribunais para a introdução de evidências (Art. 331(2) CrimPC), que é significativamente mais cedo. Resta saber se isso resultará em um aumento nas ações civis decididas por tribunais criminais, já que os tribunais, especialmente em casos de crimes de colarinho branco, têm hesitado em tomar tais decisões no passado.

4. Direitos de Participação

De acordo com o Art. 147 CrimPC, o réu foi autorizado a participar de todos os outros interrogatórios, permitindo a coordenação de suas histórias com outros co-réus. A revisão propôs restringir a participação dos réus nos interrogatórios de outros réus até que o réu em questão tivesse dado uma declaração completa. No entanto, essa sugestão foi removida, citando preocupações de que isso exacerbaria o desequilíbrio de poder existente entre as autoridades policiais e os réus. Consequentemente, os co-réus mantêm o direito de participar dos interrogatórios uns dos outros.

5. Direito de Recurso do Ministério Público Contra Decisões de Tribunais de Medidas Coercitivas

De acordo com o Art. 222 CrimPC anterior, o réu tinha o direito de apelar de decisões do tribunal de medidas compulsórias sobre prisão preventiva. Apesar da linguagem da disposição, o Tribunal Federal havia estabelecido uma prática permitindo que o Ministério Público apelasse dessas decisões também. A revisão visava codificar essa prática, mas foi finalmente rejeitada pelo Parlamento. Como resultado, o Art. 222 CrimPC agora estipula claramente que somente o réu pode apelar de decisões do tribunal de medidas compulsórias sobre prisão preventiva.

6. Criação de um Perfil de DNA

De acordo com o Art. 255(1) CrimPC, o Ministério Público está autorizado a coletar amostras de DNA para investigar um crime. No entanto, o recém-adicionado Art. 255(2) CrimPC permite a criação de um perfil de DNA não apenas em relação ao crime investigado, mas também em casos em que haja uma suspeita clara de que o réu cometeu outros crimes. Além disso, o Art. 257 CrimPC permite a criação de um perfil de DNA de uma pessoa condenada se for assumido que essa pessoa pode cometer outros crimes no futuro.

7. Direitos das Vítimas

A revisão fortaleceu ainda mais os direitos das vítimas no processo criminal. De acordo com o Art. 136(1)(b) CrimPC, as vítimas de atos criminosos podem solicitar assistência jurídica parcial ou total (unentgeltliche Rechtspflege) para fazer valer suas queixas criminais se não tiverem os recursos financeiros necessários e sua queixa tiver uma perspectiva razoável de sucesso. Essa assistência jurídica inclui a nomeação de um advogado, se necessário.

8. Selagem de Provas

A revisão esclarece a prática de selagem de provas, uma das medidas mais significativas em processos criminais. De acordo com o Art. 248 CrimPC alterado, não apenas o detentor dos documentos, mas também qualquer pessoa com um interesse legal razoável pode solicitar a selagem de provas no caso de uma apreensão. Ao solicitar a selagem, os motivos para a selagem devem ser plausíveis, mas não há necessidade de comprovar os motivos no pedido. Isso confirma a prática existente. O Ministério Público deve informar todas as pessoas potencialmente afetadas de acordo com o Art. 248(2) CrimPC. O prazo para solicitar a selagem de provas agora é de três dias, enquanto antes era de sete dias pela prática do Tribunal Federal. Durante esse período, o Ministério Público não pode inspecionar ou usar os documentos ou itens apreendidos. A revisão esclarece que uma pessoa pode solicitar a selagem pelos motivos declarados no Art. 264 CrimPC (proibição de apreensão), incluindo correspondência privilegiada, proteção de personalidade e o direito de recusar depoimento. O Ministério Público deve solicitar a remoção dos selos dentro de 20 dias após a solicitação de selamento, um prazo que permanece inalterado. No entanto, a pessoa afetada tem um prazo não extensível de 10 dias para apresentar uma declaração em resposta à solicitação de remoção. Este prazo pode ser desafiador para gerenciar um grande volume de arquivos e é notavelmente mais curto em comparação com o prazo de 20 dias para o Ministério Público. O tribunal pode decidir dentro de 10 dias após receber a declaração do réu se o assunto está claro ou pode convidar as partes para uma audiência de triagem. Durante esta audiência, a pessoa afetada deve indicar quais documentos não podem ser abertos sob a provisão de raciocínio. O tribunal tomará uma decisão imediata sobre a remoção dos selos. A decisão do tribunal pode ser apelada diretamente ao Tribunal Federal. A revisão impõe prazos mais apertados para as pessoas afetadas, ao mesmo tempo que permite prazos mais generosos para o Ministério Público.

Considerações finais

A revisão do CrimPC inclui inúmeras outras emendas, como aquelas relacionadas a motivos para detenção e o momento da nomeação de um advogado de defesa obrigatório. O impacto dessas revisões em atingir os objetivos pretendidos ainda está para ser visto.

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Dubai, a leading global business hub, attracts companies from around the world seeking new growth opportunities or aiming to enhance their international presence. Re-domiciliation, which refers to the relocation of a company’s seat or legal structure to Dubai, provides a strategic opportunity to leverage the numerous benefits of this vibrant city on the Persian Gulf.

1. What is Re-Domiciliation?

Re-domiciliation involves changing the legal domicile of a company, while other aspects such as business activities, ownership, and contracts typically remain unchanged. The process can be complex due to varying laws in the respective countries or free trade zones involved, as well as the specific circumstances of the company.

2. Reasons for Re-Domiciliation to Dubai

Companies consider re-domiciliation to Dubai for several reasons, including the favorable tax environment featuring, among other things, a 0% personal income tax rate and double taxation agreements with over 80 countries. Additionally, Dubai serves as an international financial hub, offering access to numerous international and local banks, as well as a wide range of financial and legal services. Dubai also provides business opportunities not only within the United Arab Emirates but also in neighboring countries such as Saudi Arabia. Companies relocating to Dubai can choose to establish their operations in specialized business zones (free trade zones) limited to specific business activities or in the Dubai mainland, which generally allows all business activities. Since 2015, non-UAE individuals and companies controlled by non-UAE persons can establish businesses in free trade zones or the Dubai mainland without requiring a local shareholder.

3. Re-Domiciliation Process from Switzerland

The re-domiciliation process must occur simultaneously in Switzerland and Dubai. In Switzerland, re-domiciliation requires, among other things, the approval of the general meeting to adhere to a different legal system, a public debt call, and confirmation from the competent tax authority. In Dubai, the company must obtain various confirmations and approvals, which may vary depending on the specific free zone or mainland jurisdiction.

3.1. Re-Domiciliation Process

In Switzerland, pursuant to Art. 163 of the Federal Act on Private International Law (“PILA”) and Art. 127 of the Ordinance on the Commercial Register, the following steps are required for a company to transfer its legal entity abroad:

• Issuing a public debt call to all creditors of the company to register their claims within two months.
• Providing sufficient security for all registered claims or settling all outstanding claims.
• Registering the planned re-domiciliation with the commercial register, including documents such as:
• Confirmation that the company continues to exist under the applicable foreign law.
• Auditor’s report confirming settlement of all outstanding debt.
• Resolution of the general meeting approving adherence to foreign law.
• Approval from tax authorities of the canton.
• Removal of the company from the commercial register. The public debt call is a critical component of the process, conducted in analogy with Art. 46 of the Merger Act. Potential creditors are notified three times via announcement in the Swiss Commercial Gazette to register claims against the re-domiciliating entity and request security for their claims.

3.2. Alternative: Transfer of Assets

As an alternative to re-domiciliation, a company may opt to transfer all or part of its assets to a newly established legal entity in the UAE. According to Art. 163d PILA in connection with Art. 163b PILA, this transfer is permissible under the following conditions:
• Confirmation that assets and liabilities are transferred to a newly established UAE company and that the transfer is permissible under UAE law.
• Assurance that shareholders’ rights will be adequately maintained in the UAE company.
• Compliance with all provisions of Swiss law regarding the asset transfer.
• Entry into an asset transfer agreement between the Swiss and UAE companies.
• Valid resolution from the Board of Directors approving the asset transfer agreement.
• Adherence to the applicable provisions of Art. 69 et seq. of the Swiss Merger Act. Asset transfers do not require a public debt call or arrangements for security of potential creditor claims; however, both the Swiss and UAE companies are jointly and severally liable for all creditor claims.

3.3. Requirements under UAE Law

It is essential to consider Dubai’s requirements, which depend on whether the entity is to be established in a free trade zone or on the mainland. Generally, the respective authorities require confirmations of good standing and compliance with all relevant regulatory requirements in Switzerland, as well as Arabic translations of relevant corporate documents. Requirements vary depending on the chosen venue of establishment.

Concluding Remarks

In conclusion, re-domiciliation to Dubai offers various benefits such as lower tax rates, access to a dynamic business environment, and international renown. However, the complexity of the process necessitates professional legal advice, particularly concerning each individual case. Thorough analysis of the advantages and disadvantages, along with assessment of long-term implications, is crucial to ensure that the re-domiciliation aligns with the company’s strategic objectives and is successfully implemented.

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We have the pleasure to announce that Mr. Nikita Dmitrievich Mazepin has obtained a great victory before the Court of Justice of the European Union!

TA Advisory had the honor of being part of the team defending Mr. Mazepin’s interests regarding his maintaining on the EU sanctions list. In what follows, we will review the facts of the case (I), before analyzing the reasoning of the Court of justice of the European Union (II).

1. A reminder of the facts

 In his appeal, the applicant sought:

• The annulment of the letter dated 15 September 2022, by which the Council of the European Union decided to maintain his name on the list of persons subject to the restrictive measures provided for in Council Decision 2014/145/CFSP of 17 March 2014, concerning restrictive measures with regard to actions endangering or threatening the territorial integrity, sovereignty or independence of Ukraine ;

• The annulment of the letter of 14 March 2023, by which the Council of the European Union decided to maintain his name on the list of persons subject to the restrictive measures provided for in Decision 2014/145 of the Council of the European Union, concerning restrictive measures with regard to actions endangering or threatening the territorial integrity, sovereignty and independence of Ukraine ;

• And the annulment of the letter dated 15 September 2023, by which the Council of the European Union decided to maintain his name on the list of persons subject to the restrictive measures provided for in Council Decision 2014/145.

Indeed, in the decision of 15 September 2022, it emerged that the applicant was retained on the list of sanctioned persons on the additional ground that “[The applicant] is the son of Dmitry Arkadievich Mazepin, former General Manager of JSC UCC Uralchem. Until March 2022, he was a racing driver for the Haas 1 team, sponsored by Uralchem.

He is an individual linked to an influential businessman (his father) with activity in economic sectors that constitute a substantial source of income for the government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilization of Ukraine.“

With regard to the decision of 14 March 2023, the Council of the European Union, after examining the observations of the applicant, has decided to maintain his name on the list of sanctioned persons and justifies his inclusion as follows:

“[the applicant] is the son of Dmitry Arkadievich Mazepin, former Managing Director of JSC UCC Uralchem. Until March 2022, he was a driver at Haas F1 Team, sponsored by Uralchem. His “We Compete As One” foundation is financed with funds of the Uralkali company and he therefore unduly benefits from his father.

He is a natural person associated with a leading businessperson (his father) involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.“

Regarding the decision of 15 September 2023, the Council of the European Union justified the retention of the applicant for the following reason:

“ [The applicant] is the son of Dmitry [Arkadievich] Mazepin, owner and former General Director of JSC UCC Uralchem. He was a driver at Haas F1 Team until March 2022, sponsored by Dmitry [Arkadievich] Mazepin through Uralchem’s subsidiary, Uralkali. His foundation … is set to be financed with funds from Uralkali. He is also associated with his father through joint business interests in the company Hitech GP, which was partly owned by Dmitry [Arkadievich] Mazepin through Uralkali and whose objective is to benefit [the applicant’s] career as a motorsport driver, and which is now owned by a common business associate of the two men.

He is an immediate family member benefitting from and associated with his father, … a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.“

2. The Court’s reasoning in law

On the merits, the claimant raised five pleas in law against the said decisions.

The first is the infringement of the right to effective judicial protection and of the obligation to state reasons.

The second is ‘manifest’ error of assessment, failure to discharge the burden of proof and breach of the applicable listing criteria.

The third is failure to observe the principle of proportionality and infringement of fundamental rights.

The fourth is failure to observe the principle of non-discrimination.

Finally, the fifth is failure to comply with essential procedural requirements, infringement of the rights of the defense and breach of the Council’s obligation to review sanctions periodically.

The Court has decided to confine itself to examining only the second plea in law, namely that the Council of the European Union failed to establish, in accordance with its burden of proof, that there was concrete, precise and consistent evidence to justify the maintenance of Mr. Mazepin’s name on the sanction lists.

In this regard, the Court recalled that even if the Council of the European Union has a certain discretion to determine whether the legal criteria on which the restrictive measures at issue are based are fulfilled, the courts of the Union of the European Union must ensure a full review of the legality of all such acts of the European Union (§ 65)

Thus, for the effectiveness of judicial review to be respected, the judge of the Union of the European Union must ensure that the decision by which restrictive measures have been adopted or maintained, rests on a sufficiently solid factual basis (§ 66).

As a result, when assessing whether the factual basis adopted by the Council is sufficiently solid, the Court must examine the evidence and information retained by the Council of the European Union not in isolation, but in the context in which these facts are inserted. In other words, the Council of the European Union has an obligation to prove, by means of a sufficiently concrete, precise and concordant body of evidence, the existence of a sufficient link between the entity subject to a measure freezing its funds and the regime or, in general, the situations being combated (§ 68).

In this regard and in accordance with case law, press articles may be used in order to corroborate the existence of certain facts if they are sufficiently specific, precise and consistent as regards the facts there described (§ 68).

In view of this principle, it is up to the EU authority to establish, in the event of challenge, the validity of the reasons given against the listed person concerned. (§ 69).

Thus, as restrictive measures are precautionary and therefore provisional in nature, their validity always depends on whether the factual and legal circumstances which led to their adoption continue to apply. As a consequence, it is incumbent on the Council of the European Union, in the course of periodic assessment of those measures, to carry out an updated assessment of the situation and to evaluate the impact of such measures in order to determine whether they have made it possible to achieve the objectives sought by the inclusion of the concerned person on the sanction list  (§ 70)

However, it is possible to keep a person on the list on the basis of the same evidence that justified his initial inclusion, provided that the reasons for inclusion remain unchanged and the context has not changed in such a way that evidence is now out of date (§ 71).

a. Concerning the sanction act of 15 September 2022

The question before the Court of Justice was to know whether the Council of the European Union could continue to refer to past facts already included in the initial acts concerning the applicant in order to justify the maintenance of these restrictive measures against him (§ 83).

However, the Court noted that, regarding the first acts of maintenance (i.e. from 15 September 2022), the applicant was no longer a driver for the Haas F1 Team. Thus, the presumption that the applicant’s father was the main sponsor of these activities within the Haas F1 Team and that the applicant continued to be associated with his father was insufficient, since such a presumption would be tantamount to freezing the applicant’s situation and depriving him of his rights (§ 87).

In the same vein, the Court ruled that it was not possible to consider that the mere fact that the applicant was a driver for the Haas F1 Team constituted sufficient evidence of his continuing links with his father, an influential businessman. Indeed, the maintenance of the applicant’s name on the lists in question must be examined in its overall context and not in isolation (§ 88).

On the other hand, the Court accepted that it remains conceivable that the applicant could be described as a person linked by common interests to his father, even after the termination of his contract as a driver for the Haas F1 Team. However, the Council of the European Union has not put forward sufficiently convincing evidence to this effect, even though it had the burden of proof to do so (§ 89).

The Court reminded that it is up to the competent EU authority to establish, in case of a challenge, that the reasons invoked against the listed person are well-founded, and not for that person to prove that those reasons are not well-founded (§ 96).

In addition, the Council of the European Union cannot rely before the Court on factors on which it did not rely when adopting the contested acts, in order to justify the inclusion of the applicant on the sanctions lists, since the legality of an act is assessed on the basis of factors existing at the date when the act was adopted (§96).

For these reasons, the maintaining acts of 15 September 2022, must be upheld, and must be annulled without it being necessary to rule on the other arguments or on the other pleas in law relied on by the applicant in relation to them (§ 100).

b. Concerning the sanction of 14 March 2023

Regarding the second acts of maintenance (i.e. from 14 March 2023), the question is whether the Council of the European Union has taken into account the evolution of the applicant’s situation (§ 108).

However, in the Court’s view, the Council of the European Union has failed to provide any concrete evidence that the applicant is still linked to his father, an influential businessman, through the applicant’s foundation, financed by funds that came from the Uralkali company owned by his father (§ 111).

Even if the file shows that press articles mention statements made by the applicant and Uralkali executives attesting that this foundation would be financed by funds from Uralkali, these statements predate the creation of the aforementioned foundation (§ 112).

Consequently, given that the Council of the European Union’s reasoning is limited to a hypothesis that predates the creation of the foundation, it does not present a sufficiently concrete, precise and concordant body of evidence to allow the applicant to remain on the sanctions list (§ 114).

The Court therefore annuls these acts without needing to address the other pleas in law relied by the applicant (§ 115).

c. Concerning the 15 September 2023, sanction act

Regarding the third acts of maintenance (i.e. that of 15 September 2023), the relevant legal question is whether the Council of the European Union has also taken into account the evolution of the applicant’s situation in order to keep him on the sanctions list (§ 122).

However, in the Court’s view, the Council of the European Union has not provided any evidence to support the conclusion that he is still related to his father (§ 127).

The fact that the applicant obtained an advantage from his father in order to secure his place as a driver for the Haas F1 Team is not based on any evidence (§ 129).

Moreover, in the Court’s view, Formula 1 enjoys such an international reputation and is a sporting event broadcast in numerous countries that it does not seem possible for companies to derive commercial benefits from it, even if they were fertilizer companies with no connection to the sport (§ 132).

Furthermore, there is no evidence in the files that the applicant’s foundation is intended to be financed with funds from Uralkali (§ 140).

Thus, the Council of the European Union provided no evidence that the foundation had received any funding from Uralkali and, consequently, that the applicant had received an advantage (§ 141).

In the same vein, the Court considered that the link between the applicant’s career and the company Hitech GP is purely hypothetical since the latter had employed several racing drivers and did not have only the applicant as an employee (§ 149).

Consequently, there was no concrete link between the applicant’s career and the company Hitech GP, and the Council of the European Union found no evidence to that effect (§ 154).

In view of the foregoing, the Court annuls the third acts (§ 156).

Therefore, for the above reasons, the General Court annuls the acts maintaining Mr. Nikita Mazepin on the lists of persons subject to restrictive measures, since that the family connection with his father, Russian businessperson Dmitry Mazepin, is not sufficient for him to be regarded as being linked to his father by common interests and, therefore, for him to be maintained on those lists.

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1. Introduction

2. Some of the highlights of the conference

• The importance of US Sanctions results in an applicability of the US sanctions outside of the territory of the USA (the famous secondary sanctions). As a result, a bank could be excluded from the US dollar if it does not respect US sanctions, which would in this case impact all its accounts in US dollars.

• As a result, banks are increasingly demanding that their clients provide them with authorisations not only from SECO, for operations taking place in Switzerland, but also from other authorities responsible for sanctions, such as the US and European authorities responsible for enforcing sanctions.

• one of the biggest issues concerns the question of the Ownership/Control and to determine if an entity is owned or controlled by a sanctioned person or not.

• These concepts are not applied uniformly by the various authorities responsible for applying sanctions, as different thresholds are applied for example.

• The Swiss Ordinance does not explain in detail the terms of Ownership and control. Therefore, Swiss authorities tend to apply the more developed European criteria.

• Switzerland also has no specific and detailed clause on the circumvention of Swiss sanctions.

• With regard to the United States and the need to prevent circumvention of US sanctions, during investigations by the US authorities, the compliance programmes put in place by entities, particularly banks, are subject to particular attention and scrutiny, in order to verify that the entity’s/bank’s ability to respond to these sanctions issues is indeed capable of preventing a breach of the sanctions regimes.

• The banks have to consider the applications of trade sanctions in their activities. In addition, there is a need to take into consideration the ancillary services as well as the obligation to inform MROS.

• The US authorities have highlighted certain techniques used by certain “Russian actors” to circumvent the sanctions regime, in particular the use of certain countries that do not apply sanctions against Russia.

• New restrictions will continue to be introduced by the various governments in the future and will probably become increasingly complex.

• The EU authorities are beginning to “Americanise” and are now focusing on the circumvention of sanctions, as evidenced by the 11th, 12th and 13th packages and the extraterritorial application of their sanctions regimes.

• This is already shown by the increase of extraterritorial application of the EU sanction law.

• While all this is happening, all the stakeholders are waiting for the first judicial decisions to be rendered, with the inevitable risk of contradiction.

• In the course of their investigations, the authorities, particularly the US authorities, will take a closer look at the compliance programmes put in place by the banks in order to determine the bank’s ability to respond to questions relating to the sanctions.

• In Switzerland, it could be useful to consider a general clause prohibiting the circumvention of sanctions in order to provide legal certainty.

• Switzerland’s neutrality will be called into question by this “Americanisation”, particularly with regard to the principle of territoriality of Swiss sanctions.

3. Ownership and Controll

• The financial institution (as well as all the other concerned stakeholders) should be mindful of the fact that the “ownership and/or control” rules vary between the major sanctioning jurisdictions and their application can lead to, at times, inconsistent and counter-intuitive outcomes.

• The complexity lies in the definition of the term “control”. Sometimes the authorities have difficulty in applying the control criterion because of all the possibilities offered by this criterion, which creates legal and regulatory uncertainties.

The Ownership criterion and its issues could be summarised as follow :

• Under US law, there is the threshold of “50% of ownership” triggers the application of US sanctions.

• Under EU law, the ownership of more than 50% triggers the application of UE sanctions.

• Under Swiss law, Art. 15 (1)(c) Ordinance is the legal basis regarding the ownership criteria. However the concept of ownership is not clearly defined by this legal basis. Consequently, the interpretation of ownership under Swiss law follows the interpration of ownership under EU law.

• Moreover, the 12th sanctions package has introduced the following:

The aim of the present article is to clarify the purpose of a UK Office of Financial Sanctions Implementation (“OFSI”)[1] licence, but also to guide users through an application for a licence.

1. Introduction

Generally speaking, a licence can be issued to allow activity that would otherwise be prohibited by UK financial sanctions to take place. Basically, any person or organisation involved in a transaction with those subject to financial sanctions will first need a licence from OFSI.

For OFSI to issue a licence, there must be:

• a UK designated person (“DP”) or Entity;
• or a person or entity which is controlled by a UK DP;
• or a UK nexus from a part of the transaction who is obliged to comply with UK financial sanctions.

2. General licences

A general licence allows multiple parties to undertake activities which would otherwise be prohibited.

General licences have been issued to:

• Assist in the implementation of new sanctions measures;
• Allow for the winding down of relationships when new designations are made;
• Permit the continuation of UK businesses or allow large-scale global insolvencies to proceed;
• Address common specific licence applications the OFSI receives for routine payments, and;
• Align the UK’s interests with foreign partners.

Each general licence will include specific conditions which must be complied with for the licence to be applicable.

All general licences are published on the OFSI website and are accompanied by a publication note.

It is the responsibility of any party using a general licence to ensure the activities they undertake fall within the terms of the licence. If in any doubt, independent legal advice should be sought.

Regarding the policies and the decision making process, the OFSI may use its own discretion to refuse to license particular activities, where allowing the activity would undermine purpose or the effectiveness of that financial sanctions regime.

The 16 principles help clarify the OFSI’s interpretation and applicability of the various licensing grounds in relation to DPs. The complete list of those 16 principles can be found on online, listed in general hierarchical order.[4]

These will also help applicants better understand the circumstances under which the OFSI may refuse to license certain activities, even where a licensing ground is met. When applying, it is strongly recommended to make reference to said principles in the application form – this will help the OFSI to assess the request swiftly.

It is important to note that the OFSI is unlikely to allow licences that deviate from these principles.

Anybody can apply for a licence to permit a series of transactions, whether it be the DP themselves, the customer, the bank, or a relevant third party. However, it is recommended coordinating between those interested parties to avoid duplication of applications.

3. Licence application process

The licence application process is divided in 5 stages.

Stage 1: the OFSI conducts an initial assessment of the application and gathers all genuine evidence that needs prioritisation (e.g. risk for life, risks of quick devaluation of an asset, indebtment…).

Stage 2: the OFSI gathers all relevant information, such as the parties, who the designated person is, what is the specific activity concerned.

Stage 3: the OFSI assesses the application, i.e. seeks legal advice.

Stage 4: the OFSI makes the decision.

Stage 5: the last stage is the outcome notification and, if applicable, the licence issuance. Licences will be issued by e-mail.

To the eternal question of “how much time should you allow to obtain a licence?”, the answer will be – it depends, as far as possible in advance. Applications can be complex to assess, but generally an application and subsequent issuance of licence would take at least a couple of months in most not complex cases.

A licence will most certainly have an “expiry date” – each specific licence will have relevant terms and stipulations that must be complied with, particularly in terms of the validity date.

The OFSI, or the NCA, can undertake enforcement action in the event of non-compliance.

4. Licencing amendment requests

The OFSI has a new policy in terms of amendment request to an existing licence.

Any request for a licence amendment should be submitted to the OFSI by e-mail as soon as it is apparent that a change is required.

The completed (and amended) for must be send on a new e-mail chain, with a clear mention of the original licence case reference number in the body of the e-mail. Multiple amendments to a single licence should be grouped in the same e-mail.

Indeed, the OFSI previously had some difficulties arising in locating the correct case and ensuring it is assigned to a caseworker. It is important for applicants to understand that amendment cases may not be taken forward by the original caseworker.

The new online form will soon be published on the OFSI website, allowing the OFSI to make a clearer distinction between previous licences and their changes, and will also benefit applicants as it will help avoiding delays the processing the applications.

5. Return without Action

Return without Action is the new OFSI process that allows the OFSI to focus on applications which are ready to be progressed, where a licence is needed.

Incomplete applications will have key information missing, such as who the DP is, why a licencing derogation applies, what the UK nexus is and what the payment route for a specific transaction is.

If an applicant receives a Return without Action, this basically means that the OFSI will not be able to take the application forward. However, in such case the OFSI will provide clear information about what was missing in the first application.

6. Various questions that may arise

1. Even when a charity works only with non-designated person, this doesn’t mean that it can continues acting as before the implementation of UK sanctions. NGOs are included in the restrictions scope – therefore, when working with non designated Russians, even a payment to a designated bank could trigger the sanctions. All routes must be sanctions compliant and due diligence must be carefully conducted.

2. Only one licence application must be filled out per activity, and only one person needs to do the application for such activity. This means that the OFSI doesn’t need – and doesn’t want – to receive multiple applications for the same transaction, as this will be confusing and will lengthen the licencing procedure.

3. In should be noted that if legal advice is sought, the process might go faster. Indeed, the OFSI gives priority to applications on their merit and urgency, and a good quality licence application prepared by a lawyer will allow to fasten the process.

4. A licence isn’t required if sanctions evasion is suspected. Licences only allow activity which hasn’t taken place yet and have no retroactive effect. If breach and sanctions evasion is suspected, this should be reported, and the matter will be analysed by the enforcement team.

5. All the information provided as part of the application for a licence shall be disclosed to third parties only in compliance with the UK General Data Protection Regulation and the Data Protection Act 2018.

6. In relation to the derogation relating to legal fees and expenses, the Regulations provide that the legal fees and expenses should be “reasonable” however the requirement does not require OFSI to consider “proportionality” of the estimated legal fees and expenses, in a manner which the Court is required to do whilst exercising its costs management powers in a litigation. The OFSI considers each application on a case-by-case basis and has a specific guidance on how reasonableness for legal fees is assessed.[5] It is for the applicant to demonstrate to OFSI that the legal fees and expenses they are requesting payment for are reasonable. The assessment will be carried out based on the following criteria:

• Whether the work has already taken place or if it is anticipated work;
• What the work will involve/has involved;
• Which fee earner(s) will be/have been involved in the work (and their position(s)/role(s) within the firm, including relevant level of experience);
• The fee earner(s)’ hourly rate;
• How many hours each fee earner(s) will be estimated to spend/has already spent on each workstream;
• Any supporting evidence as to why the involvement and/or the number of hours of the particular fee earner(s) is reasonable and/or proportionate to the nature and complexity of the work;
• Any expenses that are expected and have been paid out; and
• If any expenses are expected, why are they necessary.

7. Each general licence will include requirements for prior notification of use, record-keeping and reporting. These are determined on a case-by-case basis. Requirements will be stated in each general licence.

8. In a firm wants to verify that a specific licence is legitimate, it can contact OFSI for general inquiries and provide copy of licence given.

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[1] https://www.gov.uk/government/organisations/office-of-financial-sanctions-implementation

[3] https://www.gov.uk/government/news/new-law-imposes-fresh-sanctions-on-russia-accessing-uk-legal-expertise

[4] https://www.gov.uk/government/publications/financial-sanctions-licensing/ofsi-licensing-designated-individuals-licensing-principles–2#fundamental-principles

[5] https://ofsi.blog.gov.uk/2021/06/30/reasonableness-in-licensing/

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On 6 September 2023, the Swiss Federal Council decided to enter the amendments to the Swiss Civil Procedure Code (“CPC“) into force on 1 January 2025. The new provisions address long-criticized issues, in particular, facilitating access to courts and improving the efficiency of law enforcement.

1. International Commercial Courts 

In our opinion, Switzerland is rightly following the trend that has emerged inter alia in Singapore, Germany and France, namely the creation of an international commercial court. As part of the revision of the CPC, the cantons will be given the power to create specialized courts or court chambers for international commercial disputes.

Switzerland is thus expanding the excellent reputation it already has for international arbitration courts into an international court of justice for commercial matters. By creating the said court, Switzerland is strengthening its position as a renowned “legal hub”.

Cantons that wish to create such a specialized international commercial court shall have the authority to assign specific cases to said court – over and above the current rules on jurisdiction. As such, the following 4 conditions must be met:

1. The business activity of at least one party is affected. However, no registration as a legal entity in a (Swiss or foreign) commercial register is required.
2. The dispute must be of a pecuniary nature and the amount in dispute must be at least CHF 100,000.
3. The consent of the parties is required for the commercial court to have jurisdiction in these cases.
4. At least one party must not be domiciled or have its registered office in Switzerland at the time of consent.

In connection with the creation of international commercial courts, the possibility of conducting proceedings in English is now also provided for (Art. 129(2) CPC). Proceedings can only be conducted in English if a request has been submitted by all parties involved. However, this requirement should be easy to fulfill, as English as the language of proceedings can already be stipulated in the corresponding jurisdiction clause of the agreement in question.

2. Legal Costs

One key amendment is the facilitation of access to justice for persons without the necessary funds to retain an attorney at law, despite not meeting the standard legal aid requirements under Art. 117 CPC. In particular, the provisions regarding advances on costs and the liquidation of legal costs were adjusted.

a.     Advances on costs

Advances on costs pursuant to Art. 98 CPC must no longer be paid in full, but the advance is limited to a maximum of half of the estimated court costs. This is a significant reduction of the access to justice barrier.

However, there are exceptions whereby the advance payment is demanded up to the amount of the total presumed court costs in the cases mentioned in Art. 98(2)(a-d) CPC:

b.     Liquidation of legal costs

The court costs will continue to be offset against the paid advance made by the party liable for costs. However, in contrast to the previous CPC, the advance which is paid by the party not liable for costs will be repaid by the court. Any shortfall will now be claimed from the party liable for costs (Art. 111 CPC). This means that the parties no longer bear the collection risk of the other party, but rather the state.

3. Process Co-ordination

The existing rules for the coordination of proceedings will be improved in order to enable more joint and coordinated civil actions. Pursuant to Art. 90(2) CPC, it will be possible to combine civil actions of different types of proceedings in the regular civil proceedings pursuant to Art. 219 CPC. Moreover, counterclaims are always to be processed in the regular civil proceeding if the main civil action is under the regular civil proceedings pursuant to Art. 219 CPC. In addition, counterclaims for declaratory action are to be processed in the regular civil proceedings if the party in the main proceeding has initiated partial action in the simplified procedure.

4. Conciliation Procedure

As the conciliation procedure has proven to be an extremely efficient and cost-effective dispute resolution mechanism, the competencies of the conciliation authorities are to be expanded. Conciliation proceedings will now be used in a number of new disputes (Art. 5(1) lit b & d-i, 6 & 8 CPC). In addition, the authority to propose court orders will be increased from CHF 5,000 to CHF 10,000. However, the competence of the conciliation authorities to issue a binding court order for claims not exceeding CHF 2’000 remains unchanged.

5. Right to Refuse Co-Operation for In-House Councils

The revision of the CPC now also clarifies a long-discussed issue, namely the right of in-house counsel to refuse to co-operate. An in-house counsel may refuse co-operation if their employer is registered in the commercial register and the respective in-house counsel has passed the bar exam, without being registered in the cantonal bar.

6. Family Procedural Law

The practicality of the CPC in the context of family procedural law is to be improved with the revision. Specifically, contentious proceedings under family law are to be dealt with in the simplified procedure in the future, insofar as the summary procedure is applicable. In addition, the so-called principle of investigation and ex officio proceedings will generally apply to independent actions concerning child matters.

7. Documentary quality of private expert opinions of the parties

Contrary to the previous Federal Supreme Court case law, these are now to be assessed as documents, which gives them the quality of evidence. As such, party or private expert opinions are of course also subject to the free assessment of evidence by the court, and their probative value is therefore determined in the specific individual case, taking all circumstances into account.

8. Nova in proceedings with an unrestricted principle of investigation

In proceedings with an unrestricted principle of investigation, the parties may submit nova from 2025 onwards in appeal proceedings, even if the requirements of Article 317(1) CPC are not met.

9. Further amendments

There will also be numerous minor and editorial changes. For example, witness hearings and party questioning can also be conducted by video conference. In special circumstances, such as urgency, a telephone conference is possible. Participants can be connected electronically, provided that technical requirements, data protection and data security are guaranteed. Also, the requirements to initiate precautionary measures against media have been facilitated.

Concluding remark

The amendments to the CPC, set to take effect on 1 January 2025, represent a comprehensive effort to address longstanding issues, enhance accessibility to the legal system, and improve the enforcement of laws. Overall, these amendments signify a forward-looking approach to legal proceedings, aligning Swiss civil procedure with contemporary needs and international standards. The measures taken not only enhance access to justice but also position Switzerland as a jurisdiction that adapts to evolving legal landscapes.

 

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