How Do I Get Paid (Methods of Payment)
Export financing is primarily conducted through commercial sources. Payment terms are arranged with the bank or financing institution.
How Does the Banking System Operate
Switzerland is one of the world's foremost banking and financial centers with over 370 bank headquarters. The banking network is highly developed, and Swiss banks are among the world's leaders in specialized fields such as private banking and asset management. The total assets of the Swiss banking system at the end of 2005 amounted to USD 3.347 billion (SF 4.334 billion). The physical presence of U.S. and other foreign entities in Switzerland is vital to successful financial service trade and continues to play an important role in the competitiveness of financial services. Banking in Switzerland is extremely diverse. Although it is based on the principle of universal banking, several bank groups are now fully or partially specialized.
Established in 1907, the Swiss National Bank has executive offices in Bern and Zurich and branch offices in six other cities. More than one-half of its share capital is held by the cantons, the cantonal banks and other public bodies; Swiss citizens own the remaining shares. Although the Federal Government is not a shareholder, it has statutory power to appoint the majority of the Bank Council members as well as the three members of the Governing Board and their deputies. As the National Banks fulfils a public task, it is administered with the cooperation and under supervision of the Confederation.
The Swiss National Bank (SNB) conducts the country’s monetary policy as an independent central bank. Its primary goal is to ensure price stability, while taking due account of economic developments. It determines and implements monetary and credit policy, has the exclusive right to issue or withdraw bank notes and coins, and serves as a clearing-house for inter-bank transfers. Furthermore, it has an arrangement with the Principality of Liechtenstein to permit the use the Swiss Franc as the country’s currency, and the SNB clears Liechtenstein’s transactions.
The Bank Council oversees and controls the conduct of business by the National Bank. It consists of 11 members. The Federal Council appoints six members, including the president and vice president. The Shareholders appoint the remaining five members. The National Bank’s managing and executive body is the Governing Board, which is responsible for the monetary policy, asset investment strategy and international monetary cooperation. The Enlarged Governing Board consists of the three members of the Governing Board and their deputies. It is responsible for the strategic and operational management of the National Bank. Upon the recommendation of the Bank Council, the Federal Council appoints the members of the Governing Board and their deputies.
The Federal Banking Commission (FBC) supervises the Swiss banking industry, as well as securities trading and broker services. FBC makes key decisions such as granting or withdrawing banking licenses, ordering special audits, and issuing recommendations. The Federal Law on Banking and Savings Banks regulates the Swiss banking industry. The Bank Law protects the interests of creditors and entails provisions pertaining to liquidity requirements, equity requirements and lending limits. In addition to the Bank Law, an Ordinance on foreign banks regulates the establishment and operation of foreign bank branches.
Financial Services, such as portfolio management and financial counseling, can be freely offered under the law of contracts. However, the provisions of criminal law on money laundering and the Federal Money-laundering Act are binding for all providers of financial services.
The "Federal Law on Combating Money Laundering in the Financial Sector" took effect in 1998 and strengthened due diligence obligations on the part of banks and other financial intermediaries. Officials believe this legislation puts Switzerland among the leading countries in terms of establishing a legal framework with which to effectively combat money laundering.
The following is information on the key players of the Swiss banking sector:
UBS AG and Credit Suisse: The two largest banks, UBS AG and the Credit Suisse Group, together account for over 50% of the balance sheet total of all banks in Switzerland. They are universal banks engaged in all types of banking business.
Cantonal banks: The 24 cantonal banks are semi-governmental organizations with a state guarantee. Despite their close connection to the state, cantonal banks must comply with commercial principles in their business activities. They are engaged in all banking businesses with an emphasis on lending and deposits.
The Raiffeisen Group: The Raiffeisen Group consists of affiliated independent banks with strong local roots and organized along cooperative lines. The Raiffeisen banks have the highest number of branches in Switzerland and are affiliated with the Swiss Union of Raiffeisen Banks.
Private Banks: The private banks include individually owned firms, collectives, and limited partnerships. Private bankers are subject to unlimited subsidiary liability with their personal assets. Their field of activity is asset management, chiefly for private clients.
Foreign banks: The foreign banks are involved in business in which the share of foreign assets in the balance sheet total is 70% or more and in asset management.
Commercial banks: As a rule, the commercial banks are universal banks for which mortgage investments play a significant role, in addition to commercial loans.
Consumer credit institutes: Consumer credit institutes specialize in small loans to private individuals and industry.
Post Finance: The activities of Post Finance are run by the governmental postal service and include payments, investments, mortgages, loans, and retirement planning.
Swiss Interbank Clearing: Swiss Interbank Clearing operates the online payment systems SIC for Swiss Francs and euroSIC for Euro payments in Switzerland and across its borders. In addition, Swiss Interbank Clearing operates the Swiss banks’ direct debit procedures and supports them with marketing activities.
SIS Group: The SIS Swiss Financial Services Group AG is a full service provider for international securities trading, clearing, settlement and custody. The SIS Group is comprised of SIS SegaInterSettle AG; SIS x-clear AG; SAG SIS Aktienregister AG; and SIS Systems AG.
Eurex: Eurex is the world’s leading futures and options exchange and is jointly operated by the German Futures and Options Exchange (DTB) and SWX Swiss Exchange.
Foreign-Exchange Controls
The Swiss franc is freely convertible. With the exception of certain regulations applicable to banks and finance companies, there are no exchange controls. The National Bank has authority to introduce measures concerning minimum reserve requirements, foreign currency position, foreign source funds and a calendar for public issues of bonds and shares. However, these measures are intended for use only to counter exceptional circumstances, such as massive speculation resulting in overvaluation of the Swiss currency leading to significant problems for the Swiss export industry. Bank accounts may be maintained in local or foreign currencies either within or outside Switzerland without restriction. There is no distinction between resident and nonresident accounts.
Repatriation of capital, loans, dividends, interest, royalties, service fees and branch office profits can be transacted without limitation through any bank. Export proceeds may be disposed of freely. Leading and lagging of import and export payments is allowed; there are no limitations and no requirement for prior authorization. Netting of trade-related payments and financial transactions is also allowed without prior authorization.
U.S. Banks and Local Correspondent Banks
AIG Private Bank, Ltd.
Pelikanstrasse 37
CH-8021 Zurich, Switzerland
Tel: (41-44) 227 55 55, Fax: (41-44) 211 55 11
http://www.aigprivatebank.com
American Express Bank (Switzerland)
rue du Rhône 50
CH-1211 Geneva 3, Switzerland
Tel. (41-22) 319 08 08, Fax: (41-22) 311 22 88
http://www.americanexpress.com
Bank Morgan Stanley, Ltd.
Bahnhofstrasse 92
CH-8023 Zurich, Switzerland
Tel: (41-44) 220 91 11, Fax: (41-44) 220 98 00
http://www.morganstanley.com
Bank of America NT
Rue du Marché 40
CH-1211 Geneva 3, Switzerland
Tel: (41-22) 318 69 38, Fax: (41-22) 318 69 39
http://www.bankofamerica.com
Citibank (Switzerland)
Seestrasse 25
CH-8021 Zurich, Switzerland
Tel: (41-44) 205 71 71, Fax: (41-44) 202 15 32
http://www.citicorp.com
J.P. Morgan (Suisse)
rue de Confédération 8
CH-1204 Geneva, Switzerland
Tel: (41-22) 739 11 11, Fax: (41-22) 739 14 44
http://www.jpmorganchase.com
Goldman, Sachs & Co. Bank
Muensterhof 4
CH-8022 Zurich, Switzerland
Tel. (41-44) 224 10 00, Fax: (41-44) 224 10 50
http://www.gs.com
Merrill Lynch International Inc.
13, route de Florissant
CH-1211 Geneva 3, Switzerland
Tel: (41-22) 703 17 17, Fax: (41-22) 703 17 27
http://www.ml.com
Project Financing
Generally speaking, there is no special financing available for projects in Switzerland. The federal government may grant long-term loans at preferential interest rates for a limited category of projects in designated regions, primarily in remote, mountainous areas, that are threatened with economic decline. Cantonal and communal governments offer a wider variety of incentives, including financing, for investment projects in their respective areas. Most cantons maintain economic development agencies, some even with offices or representatives abroad, for the purpose of dealing with projects and investments.
Web Resources
OPIC: http://www.opic.gov
Trade and Development Agency: http://www.tda.gov/
SBA's Office of International Trade: http://www.sba.gov/oit/
USDA Commodity Credit Corporation: http://www.fsa.usda.gov/ccc/default.htm
U.S. Agency for International Development: http://www.usaid.gov
Swiss National Bank
(SNB)
Swiss Federal
Banking Commission (SFBC
Swiss
Bankers Association
Association
of Foreign Banks in Switzerland
Swiss Interbank
Clearing
SIS
Group
Eurex
Swiss
Exchange
Bank for
International Settlements