TerraLex Cross-Border Guide to Guide to Tracing Assets Around the World

As one of the world’s largest wealth management centers, Switzerland is often the target of asset recovery efforts. Complex asset recovery cases in Switzerland will generally involve criminal proceedings, bankruptcy, civil and enforcement proceedings. Indeed, since the Swiss procedural system does not provide for instruments equivalent to discovery under common law systems, an efficient way to trace and recover assets is often to involve Swiss prosecuting authorities who have wide-ranging powers not available directly to applicants and to bring a civil claim for compensation in the context of the criminal proceedings as allowed by Swiss law.

Independently from criminal proceedings, applicants may also seek the attachment of assets located in Switzerland by way of a “civil attachment” provided certain conditions are fulfilled.

There are several publicly available sources that provide information on assets located in Switzerland. In particular: - the commercial register provides information on companies (e.g. share capital, legal seat, address, corporate purpose). Each canton maintains its own commercial register, which is freely accessible. A summary version of the commercial register is available online;

• the Swiss Official Gazette of Commerce, in addition to gathering some of the information published in every cantonal commercial register, provides information regarding bankruptcies, composition agreements, debt enforcements, calls to creditors, lost titles, precious metal control, other legal publications, balances and company notices;

• the land register records every single plot of land in Switzerland, with the exception of those in the public domain. Each canton maintains its own land register, which can be consulted upon the showing of a legitimate interest (e.g. for purposes of contractual negotiations for the purchase of a property);

• the Swiss aircraft registry contains the records of all Swiss-registered aircraft and provides detailed information regarding the owner and the holder, the type of aircraft, its year of construction, the serial number, the maximum take-off mass and the fee according to its noise level;

• the debt enforcement and bankruptcy register records all debt collection proceedings filed against a debtor, and can be consulted upon request by anyone showing a prima facie legitimate interest;

• an unofficial will register that records wills and other testamentary dispositions. This register is, however, not exhaustive and only contains information that has been provided freely;

• in certain cantons (e.g. Zurich, Bern, Fribourg, Saint-Gall, Vaud, Valais and Neuchâtel), it is possible, under specific conditions, to access information contained in a person’s tax certificate; and

• judgments rendered by criminal and civil courts on the merits are accessible to the public (article 54 of the SCCP) either on the website of the relevant court in anonymized format or for consultation at the same (in which case a copy thereof can be provided after having been anonymized depending on the practice of the court).

There is no register of bank accounts in Switzerland. Swiss banking secrecy protects the privacy of banks’ clients. However, banking secrecy is not unlimited and can be lifted in the context of criminal proceedings, among others.

As against third parties There are several publicly available sources that provide information on assets located in Switzerland. In particular:

• the commercial register provides information on companies (e.g. share capital, legal seat, address, corporate purpose). Each canton maintains its own commercial register, which is accessible freely. A summary version of the commercial register is available online;

• the Swiss Official Gazette of Commerce, in addition to gathering some of the information published in every cantonal commercial register, provides information on bankruptcies, composition agreements, debt enforcement, calls to creditors, lost titles, precious metal control, legal publications, balances and company notices;

• the land register records every single plot of land in Switzerland, with the exception of those in the public domain. Each canton maintains its own land register, which can be consulted upon showing a legitimate interest (e.g. for purposes of contractual negotiations for the purchase of a property);

• the Swiss aircraft registry records all Swiss-registered aircraft and provides detailed information regarding the owner and the holder, the type of aircraft, its year of construction, its serial number, the maximum take-off mass and the fee according to its noise level;

• the debt enforcement and bankruptcy register records include all debt collection proceedings filed against a debtor, and are available to anyone showing a prima facie legitimate interest and upon request;

• there also exists an unofficial will register that records wills and other testamentary dispositions. This register is, however, not exhaustive and only contains information that has been provided freely;

• in certain cantons (e.g. Vaud and Fribourg), it is possible, under specific conditions, to access information contained in a person’s tax certificate; and

• judgments rendered by civil courts are in principle made accessible to the public; a copy thereof will be provided upon showing a legitimate interest and depending on the practice of the courts after the judgments have been made anonymous.

There is however no register of bank accounts in Switzerland and Swiss banking secrecy protects the privacy of banks’ clients but is not absolute and can be lifted, among others, in the context of criminal proceedings.

Under Swiss civil procedure rules, taking of evidence requests (e.g. hearing, document productions, etc.) may also be addressed to third parties through the intervention of the judge, generally upon request of a party. Third parties, like parties, have a duty to cooperate in the taking of evidence. However, they may refuse to cooperate in certain circumstances such as if they have a family link or a close personal relationship to one of the parties. Parties have a duty to cooperate in the taking of evidence. In particular, they have the duty to make a truthful deposition or statement as a party or a witness; to produce physical records, with the exception of correspondence with lawyers provided that such correspondence concerns the professional representation of a party or third party; and to allow an examination by an expert of their person or property. However, Swiss law does not provide for a disclosure order as it exists in certain common law jurisdictions. If debt collection proceedings were initiated against a respondent and have not been stayed by the filing of an objection or by court judgment, an applicant may apply for the continuation of the enforcement proceedings in which case, the debtor, once notified of the seizure of his assets, will be bound, under the threat of criminal sanctions to disclose his assets, including those not in his possession, as claims and rights against third parties, to the extent necessary to satisfy the amount to be seized.

The protective brief is a powerful preventive tool provided under Swiss civil procedural law available to a party fearing the filing of an ex parte injunction against it. It allows a party to submit in advance its position to the court. This brief will only be communicated to the opposing party if and when it effectively requests an ex parte injunction and shall remain in effect six months after being filed, following which it must be renewed or extended if it is to have continued effect.

Applicants may obtain provisional seizure of a respondent’s assets by way of civil attachment proceedings which has the effect of freezing all of the respondent’s identified assets in Switzerland.

The applicant can request a judge to order an attachment of the respondent’s assets if he can establish prima facie (i) that he has a claim against the respondent, (ii) if he can identify assets in Switzerland which can be attached, and (iii) if there is a ground for attachment, namely:

• the respondent has no permanent domicile (neither in Switzerland nor abroad);

• the respondent is attempting to conceal assets or is planning to leave Switzerland to avoid the performance of his obligations;

• the respondent is passing through or belongs to the category of persons who visit fairs and markets and the claim, by its nature, must be fulfilled at once;

• the respondent does not live in Switzerland and no other ground for attachment of his assets is available to the applicant, provided that the claim has sufficient connection with Switzerland or that the claim is based on a recognition of debt;

• the applicant holds a provisional or definitive certificate of shortfall against the respondent; or

• the applicant holds an enforceable title against the respondent, such as a Swiss or foreign judgment, a court-approved settlement, an enforceable deed, or an arbitral award. No prior exequatur is required to obtain an attachment on the basis of a foreign court decision or foreign arbitral award as the exequatur may be requested as a preliminary issue in the attachment proceedings.

So-called “searching attachments” or “fishing expeditions”, i.e., requests for attachment not identifying sufficiently the assets to be attached but rather aiming at finding out whether the respondent has any assets in Switzerland, are not allowed under Swiss law.

If debt enforcement proceedings are not already pending, an ordinary court action (at the appropriate forum in Switzerland or abroad) or debt enforcement proceedings must be initiated by the applicant to validate the attachment within 10 days from service of the minutes of the attachment order.

The applicant may be ordered to provide security in the form of a bank guarantee or cash deposit to cover the likely damages that could arise from an unjustified attachment.

As a rule, all of the respondent’s moveable and immoveable assets, negotiable securities and existing claims against third parties located in Switzerland may be attached. An attachment order applies only to assets held in Switzerland excluding those held abroad.

Under Swiss law, future claims may be attached only if they can be sufficiently identified at the moment of the attachment application. This requires specific and detailed information on the claim (amount, date it will be credited, origin, transferor, etc), which is typically not available to the applicant. It is not sufficient to refer in the attachment application to “any (potential) future funds and/or claims”. Accordingly, future claims may be attached if they are certain and enforceable. Even future claims subject to a condition precedent may be attached if the level of uncertainty is not excessive.

Some assets of the respondent cannot be seized by law and can therefore not be attached. Such assets are in particular indispensable items which include (i) objects for the respondent’s personal use; (ii) religious books and items of worship; (iii) tools and other objects essential for the respondent to exercise his/her profession; (iv) specific animals indispensable to nourish the respondent and his/her family or to maintain the respondent’s business; (v) the food and fuel required by the respondent for two months subsequent to the seizure or the money or credit necessary to purchase the same; (vi) the uniform equipment and arms, the military horse and the pay of a member of the army or civil defence and the community service equipment and pay; (vii) specific annuities; (viii) amounts received from charitable institutions in the event of illness, need, invalidity or bereavement; (ix) annuities, capital payments and other forms of compensation to victims or kin for bodily harm, damage to health or bereavement to the extent that such benefits constitute satisfaction, replacement of recovery costs or serve for the acquisition of aids; and (x) specific pension annuities or unmatured claims for benefits of pension funds.

There is no search order available under Swiss law. In particular, so-called “searching attachments” or “fishing expeditions”, ie, requests for attachment not sufficiently identifying the assets to be attached but rather aiming at finding out whether the respondent has any assets in Switzerland, are not allowed under Swiss law.

Only Swiss prosecuting authorities may issue search orders in the context of criminal or administrative proceedings.

A civil attachment can be obtained in support of foreign proceedings outside Switzerland provided the conditions thereof are satisfied. Swiss law does not provide for search orders. Accordingly, a search order in support of proceedings outside Switzerland can be obtained only within the framework of a request of mutual legal assistance for the taking of evidence under the conditions thereof. An overly broad letter of request, aiming at obtaining irrelevant information or obtaining evidence to substantiate a claim, so-called “fishing expeditions” will in principle be rejected.

Yes, depending on various regimes. The applicable regime depends on where the freezing injunction was obtained.

A freezing injunction issued by an EU or EFTA state is enforceable under the 2007 Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. It foresees the enforcement of interim measures, even ex parte, provided the respondent was granted the right to be heard in the underlying proceedings within a reasonable time and prior to the application for recognition and enforcement in Switzerland.

The enforcement of a freezing injunction issued by a state other than an EU or EFTA state, e.g. the U.S., is subject to debate. The prevailing view seems to be that Swiss courts cannot enforce interim measures ordered by foreign courts as Swiss private international law requires that a decision be final. The Swiss Federal Supreme Court acknowledges that this view has been adopted by the majority of the doctrine but it has not yet decided on the issue, leaving the question open. In any event, even those authors considering that foreign interim measures could be enforced under Swiss law still find that enforcement would exclude ex parte interim measures.