Chapter

SWITZERLAND

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of December 31, 2003)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 29, 1992.
Exchange Arrangement
CurrencyThe currency of Switzerland is the Swiss franc.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the Swiss franc is determined by supply and demand in the foreign exchange market. However, the Swiss National Bank (SNB) reserves the right to intervene in the foreign exchange market. All settlements are made at free market rates.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo officially fixed premiums and discount rates apply to forward exchange contracts, all of which are negotiated at free market rates.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlNo.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsIn accordance with UN Security Council resolutions, restrictions are imposed with respect to certain individuals and organizations associated with known terrorists, Al-Qaida, the Taliban, specific individuals and enterprises associated with the former government of Iraq, and certain individuals associated with the governments of Zimbabwe, Myanmar, and the previous government of the former Federal Republic of Yugoslavia.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImport and export licenses, which are issued freely, are required for commercial imports and exports of certain articles containing gold. Licenses are not required for imports or exports of gold coins or bullion.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresImport controls apply for weapons, war materials, and for sanitary or phytosanitary reasons. Imports of rough diamonds are permitted only under the Kimberly Process Certification Scheme.
Open general licensesLicenses are required mostly for agricultural products.
Licenses with quotasLicenses with quotas are required for specific agricultural products.
Import taxes and/or tariffsIn general, customs duties are levied based on the weight of goods instead of their value. On industrial goods, import tariffs are generally very low. On agricultural goods that are also produced in Switzerland, they are high, averaging about 34%; the rates on goods that are not subject to tariff quotas range up to 678%. In the framework of the General Agreement on Tariffs and Trade-Uruguay Round, all quantitative restrictions and measures having equivalent effects concerning agricultural products have been transformed into tariffs. In order to maintain market access opportunities prevailing in 1986–88, 28 tariff rate quotas were created for specific agricultural and livestock goods (fruits, vegetables, meats, wines, etc.).
State import monopolyState monopolies apply to imports of alcohol, of 80 proof and above, and salt, although private sector imports may be effected with prior authorization. Some cantons have a monopoly on imports of salt.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesA system of general and individual licenses applies to controlled exports.
Without quotasExports of weapons, war material, dual-use goods that may be used for the production of conventional weapons, and weapons of mass destruction are controlled and require a license. Exports of rough diamonds are permitted only under the Kimberly Process Certification Scheme.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securitiesForeign and domestic bond issues denominated in Swiss francs must be reported to the SNB and may be lead-managed only by a bank or a securities dealer domiciled in either Switzerland or Liechtenstein. The physical importation and exportation of Swiss and foreign securities are unrestricted. In case of major disturbances in the capital markets, the federal government may introduce a permit requirement for certain outward capital transfers (e.g., bond issues).
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsPurchases by nonresidents require approval by the canton in which the property is situated.
The approval of the canton is subject to supervision and appeal by the federal government.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investorsThe overall limit on investments in foreign currencies by life insurance and non-life insurance companies is 30%, with limits for foreign equities, bonds, and real estate of 25%, 20%, and 5%, respectively, of the total portfolio. These provisions also apply to pension funds, but they are not binding with respect to pension funds that have prudential portfolio management practices.
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyThe minimum limit on portfolio investment locally is 70%.
Currency-matching regulations on assets/liabilities compositionForeign currency liabilities of insurance companies must be at least 80% covered with assets in the same currency.
Other controls imposed by securities lawsNo.
Changes During 2003
No significant changes occurred in the exchange and trade system.

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