Federal Council repeals the transitional provision in the Ordinance on the International Automatic Exchange of Information in Tax Matters

A participating country is a country with which an AIA agreement exists, according to the definition of the Automatic Information Exchange Standard (AIA). Financial institutions have increased due diligence obligations vis-à-vis non-participating countries.

When the AIA was introduced, the Organisation for Economic Cooperation and Development (OECD) decided that countries could include a transitional provision in their national law whereby countries that have declared themselves willing to implement the AIA are also considered to be participating. The reason for this is that the AIA is not being introduced by all states at the same time, but the AIA agreement network is being gradually expanded. The purpose of the transitional provision was to reduce the burden on financial institutions during the introduction phase of the AIA. Switzerland has made use of this in the Ordinance (Article 1).

In the meantime, more than 100 states and territories, including Switzerland, have introduced the AIA and expanded their network of agreements. Against this backdrop, the OECD called on the states to abolish the transitional provision in autumn 2017.

With its decision today, the Federal Council is implementing this international requirement. In doing so, it is ensuring that the global AIA standard is implemented correctly. The Swiss network of agreements currently comprises over 75 AIA partner states. The lifting of this transitional provision should have only a minor impact on the practical implementation of AIA by Swiss financial institutions.