Swiss Corner

Switzerland neutrality

Swiss neutrality is one of the main principles of Switzerland’s foreign policy which dictates that Switzerland is not to be involved in armed or political conflicts between other states. This policy is self-imposed, permanent, and armed, designed to ensure external security and promote peace.

Since World War II, Switzerland has taken a more active role in international affairs by aiding with humanitarian initiatives, but it remains fiercely neutral with regard to military affairs. It has never joined the North Atlantic Treaty Organization (NATO) or the European Union, and only joined the United Nations in 2002. Despite its longstanding neutrality, the country still maintains an army for defence purposes and requires part-time military service from all males between the ages of 18 and 34.

Swiss Political stability

The Swiss Federal Council is a seven-member executive council that heads the federal administration, operating as a combination cabinet and collective presidency. Any Swiss citizen eligible to be a member of the National Council can be elected; candidates do not have to register for the election, or to actually be members of the National Council. The Federal Council is elected by the Federal Assembly for a four-year term.

The largely ceremonial President and Vice President of the Confederation are elected by the Federal Assembly from among the members of the Federal Council for one-year terms that run concurrently. The President has almost no powers over and above his or her six colleagues, but undertakes representative functions normally performed by a president or prime minister in single-executive systems.

The Swiss executive is one of the most stable governments worldwide. Since 1848, it has never been renewed entirely at the same time, providing a long-term continuity.

Switzerland is a long-time friend of China

In 1950, Switzerland was one of the first Western countries to recognize then newly founded People’s Republic of China. The two countries have enjoyed long-term exchanges and cooperation ever since, with remarkable results.

In 2007, Switzerland was among the first European countries to recognize China’s market economy status; in 2013, it became the first continental European country to sign a free trade agreement with China; and in 2015, it became one of the first European members of the Asian Infrastructure Investment Bank.

China is now Switzerland’s third-largest trading partner, third for exports and sixth for imports.

The innovative strategic partnership between the two countries, established in 2016, is the first of its kind between China and a foreign country.

President Xi Jinping has pointed out many times that the two sides have jointly cultivated the China-Switzerland cooperation spirit of equality, innovation, and win-win results and set an example of equality, mutual respect and win-win cooperation between countries that are different in social systems, development stages and sizes.

Banking system

The banks in Switzerland manage about one-quarter of global assets managed cross-border.

The banks in Switzerland had assets under management totalling CHF 7,893.4 bn at the end of 2019. This represents an increase of CHF 959.8 bn or 13.8% year-on-year. The share of non-resident customer assets remained virtually unchanged at 47.6%.

Secrecy

On December 3, 2008, the Federal Assembly increased the prison sentence for violations of banking secrecy from a maximum of six months to five years.

Switzerland adopted the International Convention on the Automatic Exchange of Banking Information (AEOI) in 2017, this agreement includes the Common Reporting Standard (CRS).

The CRS does not, however, override the Swiss Banking Law of 1934, so the client’s expenses (withdrawals) and investments are not disclosed. Thus, tax authorities cannot “go fishing” for tax evaders, they must directly link a financial crime to the client’s account. The disclosed information can only be used for tax auditing and Swiss authorities may prevent disclosure.

The Swiss Justice Ministry announced in March 2018 that disclosure of client information in a pending court case involving a Swiss bank is subject to federal espionage and extortion charges in addition to charges relating to banking secrecy laws.

A small and educated population

Similar in many aspects with Hong Kong, Switzerland has a population of 8.3 million; about 5 million of them live in the Swiss Plateau in between the Jura Mountains and the Swiss Alps.

Most people in Switzerland are Christianincluding 42% Roman Catholic and 35% Protestant, with 11% stating no religious affiliation at all.

The Swiss are an educated population; in 2015, 88% of adults aged 25–64 had the equivalent of a high school diploma.