Switzerland Today
Dear Swiss Abroad,
World Economic Forum (WEF) founder Klaus Schwab is back in the headlines as the WEF launches a probe into him and his wife.
Also making news: concern over job losses as Swiss pharma giant Roche announces $50 billion in US investments. But there’s finally good news for scandal-plagued arms group Ruag.
And where are the most crypto ATMs in Switzerland? Find out below.
Sunny regards from Bern,
The World Economic Forum (WEF) has confirmed it has opened an internal investigation into its founder, Klaus Schwab, following a whistleblower letter alleging misconduct.
As mentioned in yesterday’s briefing, Schwab informed the WEF board of his resignation during an extraordinary meeting held on Easter Sunday.
According to the Wall Street Journal, which broke the story, the anonymous letter accuses Schwab and his wife of financial and ethical misconduct. Swiss public broadcaster, RSI, writes of allegations including asking staff to withdraw thousands of dollars from ATMs to pay for private in-room massages, and Schwab’s wife allegedly organising fake meetings to justify luxury trips paid for by the WEF.
A spokesperson for the Schwab family has denied the allegations and says Klaus Schwab intends to file a lawsuit against the whistleblower and “anybody who spreads these mistruths”.
As trade tensions with the United States persist, Swiss firms are stepping up US investments. What does this mean for Swiss jobs and influence abroad?
That’s the question posed by the Tages-Anzeiger today following reports that Roche will invest $50 billion (CHF41 billion) in US research and production. Earlier this month Novartis announced $23 billion in US investments.
While not necessarily new, these moves reflect the US market’s growing dominance, which accounts for 60% of Swiss pharmaceutical exports. But the shift could have wide-ranging consequences: the pharma sector contributes one-third of Switzerland’s economic growth, 5% of GDP and employs 46,000 people.
Industry insiders say this shift isn’t just about US pressure. Switzerland has become less attractive as a production hub, due to slow regulatory approvals, drug price caps and uncertain EU relations. “The deterioration in Switzerland’s attractiveness as a location has nothing to do with Donald Trump,” Scienceindustries Director Stephan Mumenthaler told the Tages-Anzeiger.
Finance Minister Karin Keller-Sutter and Economics Minister Guy Parmelin are attending the IMF and World Bank Group meetings in Washington from today until Friday. They will probably hold bilateral talks with the US on tariffs.
Finally, some much needed good news for the state-owned arms manufacturer Ruag: a criminal complaint against former executives has been dropped.
Last year General Atomics Europe (GAE) CEO Harald Robl filed a civil lawsuit against Ruag. Robl acquired Ruag Aerospace in 2021, a subsidiary of the state-owned arms manufacturer. He accuses Ruag of falsifying balance sheets, and is claiming a €40 million (CHF37.5 million) loss. Robl says he incurred losses after a Ruag employee falsely suggested aircraft orders could be completed in much shorter timeframes than was feasible. In reality, the completion took twice as long, leading to the loss in expected profits.
Robl told Swiss public broadcaster, SRF, that he only became aware of the discrepancies after the acquisition, admitting he was “naive”. “Normally, a Swiss state-owned company is a reputable partner you trust,” he said.
However, the public prosecutor’s office in Munich decided to close the criminal investigation against former Ruag executives and two external auditors, citing insufficient evidence.
Robl has appealed the decision, and a separate €40 million civil lawsuit remains ongoing. That case will be heard in June before the Munich Regional Court.
Zurich is known as Switzerland’s banking capital – and its crypto capital too. The city has the most crypto ATMs in the country, with a striking number concentrated in the Langstrasse district.
Half of all crypto machines in Zurich are located around the Langstrasse district. A Tages-Anzeiger investigation shows how weak oversight of these machines is enabling scammers.
In one case, an 85-year-old woman was tricked by an individual posing as a police officer into withdrawing CHF12,000 ($14,600) and depositing it via a crypto ATM in Langstrasse. She later discovered that CHF1,000 had disappeared.
In 2023 the Swiss Financial Market Supervisory Authority (FINMA) warned that some crypto ATMs were being used by drug-trafficking networks. An investigation by the Tages-Anzeiger shows crypto ATMs are also being exploited by organised fraud rings.
FINMA has no direct oversight of crypto ATM operators, which are instead regulated by self-regulatory organisations (SROs).
While the woman in the Tages-Anzeiger article was not able to get her money back, she was able to identify the scammer, who was later arrested and is suspected of defrauding CHF25,000 in total.
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