RESTRICTED
WORLD TRADE S/FIN/W/12/Add.2
10July1997
ORGANIZATION(97-2938)
Original: English Committee onTrade inFinancial Services
COMMUNICATION FROM SWITZERLAND
Initial Offer onFinancial Services
Addendum
Thefollowing communication iscirculated attherequest ofSwitzerland tomembers ofthe
Committee onTrade inFinancial Services.
_______________
Switzerland hereby submits itsinitial offer ofSpecific Commitments andArticle II(MFN)
Exemptions infinancial services fortheresumed financial services negotiations. Itdoesreflect legislative
andregulatory changes thathaveoccurred since 1995 andthusfurther improves thealready liberal
regime Switzerland provides inthefinancial services sector.
Thisinitial offerisconditional anditsmaintenance willdepend onthelevelofcommitments
undertaken byother WTO Members.
Switzerland retains itsrighttomodify orwithdraw allorparts ofitsspecific commitments
onfinancial services andtolistMFN exemptions, inaccordance withtheSecond Decision onFinancial
Services of21July1995 asamended bythedecision of29May1997.S/FIN/W/12/Add.2
Page2SWITZERLAND
INITIAL OFFER -SPECIFIC COMMITMENTS ONFINANCIAL SERVICES
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
7. FINANCIAL SERVICES
Commitments onbanking, securities andinsurance services inaccordance withthe"Understanding onCommitments inFinancial Services" (hereafter
"Understanding") andsubject tolimitations andconditions ascontained inPartI(horizontal commitments) andaslisted below. Itisunderstood that
paragraph B.4ofthe"Understanding" does notimpose anyobligation toallow non-resident financial services suppliers tosolicit business.
Insurance and
Insurance-Related ServicesMonopoly rights asindicated inparagraph
B.1ofthe"Understanding": apublic
monopoly onfireandnatural damage
insurance onbuildings exists in19
cantons (Zurich, Berne, Lucerne,
Nidwalden, Glaris, Zoug, Fribourg,
Soleure, Bâle-Ville, Bâle-Campagne,
Shaffhouse, Argovie, St-Gall, Grisons,
Appenzell Rhodes Extérieures,
Thurgovie, Vaud, Neuchâtel, Jura). In
thecantons ofNidwalden andVaud, the
public monopoly onfireandnatural
damage insurance covers alsomovable
property located inthebuildings.S/FIN/W/12/Add.2
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(1)Transactions asindicated inparagraph B:3
ofthe"Understanding": theunderwriting
ofaircraft liability insurance requires a
commercial presence inSwitzerland.(1)Acquisition ofrealestate byforeigners is
limited asindicated inPartI;inaddition
thefollowing specific restrictions apply:
foreign orforeign-controlled insurance
companies areauthorized toacquire
property thatserves asasecurity for
mortgage loans incaseofbankruptcy or
liquidation oncondition thattheacquirer
sellstheproperty within twoyears from
dateofacquisition; foreign or
foreign-controlled insurance companies are
authorized toinvest inrealestate,
provided thetotalvalue ofthebuyer 's
property does notexceed thetechnical
reserves necessary forthecompany 's
Swiss activities, according toSwiss law.
(2)Transactions asindicated inparagraph B.4
ofthe"Understanding": theunderwriting
ofaircraft liability insurance requires a
commercial presence inSwitzerland.(2)NoneS/FIN/W/12/Add.2
Page4Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(3)Commercial presence does notcover the
setting upofrepresentative offices; for
insurance companies incorporated in
Switzerland, thelegal form ofa
joint-stock company (Aktiengesellschaft,
société anonyme) oramutual association
(Genossenschaft, société cooperative) is
required; forbranches offoreign
insurance companies, thelegal form ofthe
insurance company inthehead office
country must becomparable toaSwiss
joint-stock company ortoaSwiss mutual
association; participation inthebasic
health insurance scheme requires health
insurance suppliers tobeorganized inone
ofthefollowing legal entities: association
(Verein, association), mutual association,
foundation (Stiftung, fondation) or
joint-stock company; nonewhealth
insurance supplier shall berecognized for
participation inthebasic health scheme
until 31December 1995;(3)Aminimum ofthree years ofexperience
inthedirect insurance business inthehead
office country isrequired; acquisition of
realestate byforeigners islimited as
indicated inPartI;inaddition the
following specific restrictions apply:
foreign orforeign-controlled insurance
companies areauthorized toacquire
property thatserves asasecurity for
mortgage loans incaseofbankruptcy or
liquidation oncondition thattheacquirer
sellstheproperty within twoyears from
dateofacquisition; foreign or
foreign-controlled insurance companies are
authorized toinvest inrealestate,
provided thetotalvalue ofthebuyer 's
property does notexceed thetechnical
reserves necessary forthecompany 's
Swiss activities, according toSwiss law.
participation inthestatutory pension funds
scheme (Berufsvorsorge/ prévoyance
professionnelle) requires pension funds to
beorganized intheform ofamutual
association orafoundation.
(4)Unbound except asindicated inPartI (4)Unbound except asindicated inPartIS/FIN/W/12/Add.2
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Banking andOther Financial
Services
(excluding insurance)Monopoly rights asindicated inparagraph
B.1ofthe"Understanding": twomortgage
bonds issuance institutes have been
granted amonopoly fortheissuance of
specific mortgage bonds ("Schweizer
Pfandbrief"); withregard tothefirst
institute onlySwiss cantonal banks are
accepted asmembers andinthecaseof
thesecond institute Swiss-controlled
banks banks withhead office in
Switzerland whose national mortgage
loan business amounts loans amount toat
least 60percentofthebalance sheet can
bemembers ofthese twoinstitutes; the
issue ofother mortgage-backed bonds is
notaffected bythisregulation.S/FIN/W/12/Add.2
Page6Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(1*)Membership instock andoptions and
futures exchanges requires acommercial
presence inSwitzerland; participation in
settlement andclearing networks ismay
besubject toacommercial presence in
Switzerland; mutual funds (collective
investment funds) have tobe
lead-marketed through banks having a
commercial presence inSwitzerland;
marketing ordistribution offoreign
investment funds asdefined bySwiss law
requires authorisation andcanonlybe
made through alicensed representative
agent; Swiss franc denominated issues can
belead-managed onlybyabank ora
licensed securities dealer having a
commercial presence (registered office or
branch office) inSwitzerland.(1)Acquisition ofrealestate byforeigners is
limited asindicated inPartI;inaddition
thefollowing specific restriction applies:
foreign orforeign-controlled banks are
authorized toacquire property thatserves
asasecurity formortgage loans incaseof
bankruptcy orliquidation oncondition that
theacquirer sellstheproperty within two
years from dateofacquisition; theissue
offoreign collective investment funds is
subject tostamp duty.
(2)Swiss franc denominated issues canbe
lead-managed onlybyabank ora
licensed securities dealer having a
commercial presence (registered office or
branch office) inSwitzerland.(2)None
*Notonlytransactions indicated inparagraph B.3ofthe"Understanding" butthewhole range ofbanking andother financial services transactions arecovered
(excluding insurance).S/FIN/W/12/Add.2
Page7Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(3)Commercial presence offoreign financial
institutions service suppliers issubject to
specific licensing requirements relating to
thename offirmandtheregulations on
financial institutions inthecountry of
origin; commercial presence maybe
denied tofinancial institutions service
suppliers whose ultimate shareholders
and/or beneficial owners arepersons ofa
non-GATS Member; representative
offices canneither conclude ordeal
business noractasanagent.(3)Acquisition ofrealestate byforeigners is
limited asindicated inPartI;inaddition
thefollowing specific restriction applies:
foreign orforeign-controlled banks are
authorized toacquire property thatserves
asasecurity formortgage loans incaseof
bankruptcy orliquidation oncondition that
theacquired sellstheproperty within two
years from dateofacquisition.
(4)Unbound except asindicated inPartI (4)Unbound except asindicated inPartIS/FIN/W/12/Add.2
Page8SWITZERLAND -LIST OFARTICLE II(MFN) EXEMPTIONS
Sector orsubsector Description ofmeasure
indicating itsinconsistency
with Article IICountries towhich the
measure appliesIntended duration Conditions creating theneed
fortheexemption
Banking andOther
Financial Services
(excluding
insurance)Toallow persons established in
thePrincipality ofLiechtenstein,
without requiring acommercial
presence inSwitzerland, to
participate insettlement and
clearing networks andto
lead-manage Swiss franc
denominated issues.Principality ofLiechtenstein Indefinite Measures ensuing from the
monetary union between
Switzerland andthePrincipality
ofLiechtenstein.