Financial policy tops parliament agenda

A bird's-eye view of the House of Representatives - a political stage for the next few weeks Keystone

A deal with the United States extending legal assistance in tax probes is likely to catch media attention during the regular three-week spring session of parliament.

Debates over the circumstances of the recent resignation of the Swiss National Bank president, as well as other financial policy issues, are also high on the agenda.

In December, the Senate approved a deal granting information on US clients of Swiss banks to the authorities in Washington investigating suspected tax dodgers. The House of Representatives is now due to debate it.

Passage of the bill in the House appears certain after the centre-left Social Democrats pledged to join the centre-right parties and give up their opposition.

The party-political policy U-turn came in the wake of last week’s decision by the government to seek to boost due diligence requirements for banks in a bid to clean up Switzerland’s tax haven image.

The accord foresees that Washington no longer has to provide the name and other details of a suspected tax dodger, but legal assistance is granted based on a certain pattern of bank client behaviour.

US pressure

The expected approval of the bill on Wednesday should help the Swiss government and the banking sector avoid further pressure from the US, which has threatened legal action against Switzerland’s financial sector. However, Finance Minister Eveline Widmer-Schlumpf has refused to link the bill directly to a swift solution of the stand-off between Washington and at least 11 Swiss banks.

The rightwing Swiss People’s Party is now the only main group which remains opposed to the deal, arguing it would further undermine cherished Swiss banking secrecy.

This was dealt a blow when the government in March 2009 agreed – in line with standards of the Organisation for Economic Development and Co-operation (OECD) – to lift the legal distinction between criminal tax fraud and accepted forms of tax evasion for foreign clients of Swiss banks.

In the same year, Switzerland handed over nearly 4,500 names to Washington as part of a deal to avoid potentially disastrous legal action against the UBS bank.

National Bank

Time has been set aside in both parliamentary chambers during the third week of the session for discussions over the reasons which led to the resignation in January of the former head of the Swiss National Bank, Philipp Hildebrand.

He had come under increasing pressure over his wife’s controversial private currency transactions after a former bank employee, in violation of banking secrecy rules, helped publish confidential client data.

Observers have described the fall of Hildebrand as part of a political manoeuvre by the People’s Party strongman, Christoph Blocher.

Parliament could decide to discuss the creation of a special parliamentary investigation committee. However, it has no say over possible court action or the appointment of a successor to Hildebrand as the National Bank enjoys wide-ranging autonomy.

An investigation by a cantonal prosecutor is underway into an alleged breach of banking secrecy rules, while the central bank has decided to examine its own corporate governance regulations more closely.

Asylum

Among the main issues tabled is an overhaul of the system of lump-sum taxation for wealthy foreigners, a proposal to grant the Swiss hotel sector a preferential value added tax rate and approval of a planned reform of the International Monetary Fund, aimed at increasing financial contributions from its member states. Switzerland joined the IMF in 1992 and has held a seat on its executive board.

Away from financial matters, parliament was due to begin discussions about plans to tighten citizenship rules, but the debate was struck off the list at short notice.

The government is set to face harsh criticism by rightwing and centre-right parties over its asylum policy as the number of asylum applications continues to rise, reaching a ten-year high in January.

The proposals tabled include making development aid conditional on countries’ cooperation on asylum matters, speeding up the asylum procedure and the reintroduction of border controls with neighbouring Italy despite a European single-border agreement.

Labels, bombs, troops

The stakes are high for the agricultural sector, the food and the watchmaking industry as parliament begins discussions on boosting domestic protection under the designation of origin “Made in Switzerland” and the Swiss cross.

A key bone of contention is a plan to reduce the minimum requirement for a product to receive a “Swiss” label.

Final approval from parliament is expected for an international agreement banning the production, use, stockpiling and proliferation of cluster bombs. The convention was signed by the government in 2008 and has been debated in parliament twice before as conservative parliamentarians tried to block approval.

Both chambers are set to give their tacit approval to the deployment of special forces to protect the Swiss embassy in Libya.

It reopened last October following the fall of the regime of Moammar Gaddafi. But the use of a British private security firm, which sought to set up its commercial headquarters in Switzerland, has caused public concern.

Context

As a rule parliament meets four times a year for a three-week session in the capital, Bern.

Parliament is made up of two chambers, the 200-member House of Representatives and the 46-seat Senate. They have equal power.

Decisions, including legal amendments and motions need approval by both chambers to be carried.

Eleven parties, forming seven parliamentary groups from left to right, are currently represented in parliament.

The seven-strong government is made up of members of five parties.