On 21 May 2014, the Swiss Federal Council took a next step towards the introduction of AIA by adopting draft mandates for negotiating the new global AIA standard with partner states. Over the summer, the relevant parliamentary committees and cantons will have the opportunity to contribute their comments and suggestions. At OECD level, it is expected that the new global standard will be adopted in autumn 2014.
The Swiss Federal Council (Federal executive branch) requires the AIA standard to include the following elements:
- only one global standard
- exchanged information to be used solely for the agreed purpose (principle of speciality)
- information should be reciprocal, i.e. two way flow of information
- data protection must be ensured
- beneficial owners of trusts and certain financial setups should also be identified
In addition, the Swiss Federal Council intends to include into the negotiations on AIA the issues of “regularisation of the past” and market access abroad for Swiss financial institutions. The goal is to further improve overall competitiveness.
The Swiss Federal Council intends to take the following next steps:
- Negotiate the introduction of AIA with the EU, entailing among other things reorientation of ongoing negotiations on the extension of the EU Savings Tax Agreement.
- As regards FATCA, negotiations with the United States on a possible switch from the current Model 2 IGA to a Model 1 IGA, in effect resulting in AIA between the competent authorities on a reciprocal basis.
- Explore the possible scope of negotiations on AIA with selected jurisdictions, in particular those with close economic and political ties to Switzerland, provided their taxpayers are offered sufficient scope for regularisation.
- As current Swiss domestic law does not allow for AIA, implementing legislation will have to be enacted.
After consultations with relevant interest groups (including cantons, parliamentary committees and members of the financial industry) the negotiation mandates should be finalised and adopted by the Swiss Federal Council in autumn this year. Implementing legislative proposals will follow later.
From a perceived taboo AIA evolved to become reality in the Swiss legal landscape within the scope of a couple of years. It remains to be seen whether the intended reciprocity will be achieved with all partner jurisdictions. And whether AIA in relation to jurisdictions with a questionable human rights record is a desirable thing will be up for debate, too.