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1. Coordination between Switzerland and the European Union

The legal framework governing relations between Switzerland and the EU is based on a bilateral agreement: the Agreement of June 21, 1999 between the Swiss Confederation, of the one part, and the European Community and its Member States, of the other, on the free movement of persons (hereinafter "ALCP").

Annex II of this agreement refers to European Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, and to European Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004.

ALCP coordination rules must be applied as a matter of priority, even if they run against to European rules (Métral Jean/Moser-Szeless Margit, L'accord sur la libre circulation des personnes: coordination des systèmes de sécurité sociale et jurisprudence du Tribunal fédéral (II), REAS 2007, p. 169).

These regulations strengthen cooperation between the social security institutions of the EU Member States and Switzerland, particularly where old-age institutions are concerned.

In particular, if you contribute in more than one country, each pays a pension or lump-sum benefit corresponding to the assets accumulated for work carried out in its own country. It is not possible to transfer occupational assets between pension funds located in different countries. Therefore, if you have contributed in several countries, you will receive an annuity or lump-sum payment from each of them, depending on the applicable conditions.

2. AVS/AHV pension (1st pillar)

In Switzerland, access to ordinary first-pillar benefits is conditional on reaching the age of 65 (art. 21 al. 1 LAVS).

In addition to ordinary benefits, it is possible to opt for early retirement one or two years before ordinary retirement age, i.e. at 63 or 64. There are no specific grounds for early retirement (poor health, etc.), and only the age requirement (art. 40 al. 1 LAVS) and any purchase of regulatory benefits (art. 1b OPP 2) are relevant in determining this entitlement.

With regard to foreign workers, art. 18 para. 2 LAVS specifies that they and their survivors who are not Swiss nationals are only entitled to a pension as long as they have their domicile and habitual residence in Switzerland.  The notion of domicile refers to that of art. 23 to 26 of the Swiss Civil Code (art. 13 al. 1 LPGA), and that of habitual residence (art. 13 al. 2 LPGA) "corresponds to the place where the person concerned stays for a certain period of time, even if the duration of this stay is limited from the outset" (ATF 141 V 530, consid. 5.1. and references cited). Consequently, a person without Swiss nationality who permanently leaves Switzerland to settle abroad loses his or her entitlement to a Swiss AVS/AHV pension.

3. Professional pension provisions (2nd pillar)

In the case of professional pension provision (2nd pillar), entitlement to retirement benefits begins at the age of 65 (art. 13 para. 1 BVG).

The income capitalized over the years in the occupational pension account may be paid out in the form of an annuity (monthly payment) or a single lump-sum payment from the total occupational pension assets. It is important to note that an annuity can only be paid out once a certain amount of contributions has been made, otherwise only a single lump-sum payment can be made. To find out how much you can expect to receive, contact your pension fund.

Another important note: it is not possible to make a lump-sum withdrawal before retirement or early retirement age when leaving Switzerland permanently to settle in an EU/EFTA country (Vuilleumier Frédéric, Prévoyance professionnelle et aspects internationaux - partie II, in Droit fiscal et assurances sociales, en particulier la prévoyance professionnelle et les aspects transfrontaliers [de Vries Reilingh Daniel, ed. Zurich (Schulthess) 2016, p. 159 ff, p. 178; Office fédéral des assurances sociales OFAS, Prévoyance professionnelle (2e pilier), Prestation de libre passage : n'oubliez pas vos actifs et prévoyances).

4. What happens in the event of a spouse's death?

The surviving spouse is entitled to a widower's pension under the following cumulative conditions:

• · If the surviving spouse has at least one dependent child or has reached the age of 45 (art. 19 al. 1 let. a LPP);
• · If the surviving spouse has been married to the deceased for at least five years (art. 19 al. 1 let. b BVG/LPP);
• · If the deceased had made sufficient contributions (to the first pillar);
• · If the deceased's pension assets have not previously been withdrawn as a lump sum.

Survivor's pensions (in this case, the widower's pension) are paid in the EU under the same conditions as in Switzerland. However, they cannot be paid at the same time as an old-age pension in Switzerland. When two pensions (such as a widower's pension and an AHV/AVS pension) compete, the higher of the two is paid (art. 24b LAVS). If the surviving spouse has contributed more than the deceased spouse, he or she is likely to receive only his or her old-age pension, and vice versa.

Similarly, some countries reduce their benefits when foreign pensions are combined with national pensions (art. 10 of European Regulation (EC) no. 987/2009).

5. Choosing between an annuity and a lump-sum payment, and methods of payment abroad

Depending on your state of health, years of contributions, spouse's needs, life plans, etc., you will need to assess whether it is preferable to opt for an annuity paid over the long term (generally until the beneficiary's death) or a withdrawal of all contributions (i.e. a lump-sum payment).

A lump-sum payment in the event of early retirement will only be partial: a sum indicated on the insurance certificate must remain in the vested benefits account pending retirement age or death. This amount varies from one pension fund to the other.

6. Conclusion

Swiss social security is available throughout Europe to Swiss nationals, but to foreigners only in Switzerland. Note also that health is not a relevant factor when it comes to early retirement. In terms of crucial choices, a lump-sum payment is preferable when health is not at its best in order to facilitate access to pension assets for the surviving spouse, but an annuity is preferable when the comfort of a monthly payment is required.

Please note that above considerations apply in principle to all EU/EFTA countries.

Eurolegal Team : Auriane PHILIPPE, Thomas AGUIAR, Ilona CADOUX, Marie CARRILLO

In 2018, while taking a leisurely stroll along a pavement, a mother and her 38-year-old daughter were hit by a driver who had lost control of his car. The daughter died instantly and the mother was seriously injured. The Swiss authorities did not find the driver guilty on the grounds that it was not possible to determine exactly the circumstances of the blackout he was claiming. The Swiss criminal court therefore acquitted him of any guilt and of any penalty.

How can homicide, even unintentional homicide, go unpunished? This is the question we put to the judges of the European Court of Human Rights (hereinafter: ECtHR), invoking Article 2 of the Convention, which stipulates that "everyone's right to life shall be protected by law", as well as Article 6, which requires guarantees for the conduct of the trial.

After appealing to all the Swiss courts, the applicant (the victim's mother) turned to the ECtHR to obtain justice for herself and her daughter (who died at the scene), and following the accident that had left her permanently disabled. She raised a number of complaints against our courts. In short, according to the claimant, the Swiss courts have failed to fulfil their obligation under Article 2 of the European Convention on Human Rights (ECHR). The latter requires the establishment of an effective and independent judicial system making it possible to establish the circumstances of the death and, where appropriate, to hold those responsible to account for their actions. This positive obligation under the same Article must be interpreted as applying in the context of any activity, public or otherwise, in which the right to life may be at stake (Ciechońska v. Poland, 2011, § 69; Banel v. Lithuania, 2013, § 68). In both these cases, the ECtHR accepted that the national courts had not done everything possible to ensure that unjustified violations of the right to life did not go unpunished. Such conduct would prevent any appearance of tolerance of unlawful acts and maintain public confidence (Oruk v. Turkey, 2014, §46).

In our case, the acquittal of the driver could appear to undermine the deterrent role of a judicial system in preventing violations of the right to life.

The first grievance, raised by the applicant, is based on the failure of the Swiss courts to take account of the evidence that could lead to the establishment of the circumstances of the death and, where appropriate, to hold those responsible to account for their actions, as well as their obligation to ensure the effective operation of a certain regulatory framework. In this case, the Swiss courts were content to rely on two medical expert reports, even though there was a third that supported a certain degree of responsibility on the part of the driver. The attribution of liability could not be accepted on the basis of the results of the third expert report, which suggested that the driver had fallen asleep during the accident.

The second grievance is based on the inadequate internal regulatory framework for road traffic. The latter is not sufficiently dissuasive and rigorous to ensure the effective prevention of unlawful acts. The Swiss legal system does not provide for a ban on driving under certain conditions. Moreover, the applicant complains that the murder in this case has gone unpunished. Neither penalties nor measures had been taken against the perpetrator for taking medication. The effects of these drugs, however, included a significant reduction in cognitive performance and drowsiness. Although the driver represented a potential danger to road safety, it was considered that he had not breached his duty of care. However, Swiss case law assumes that the alleged offender was negligent if he failed to take the care and make the effort that could be expected of him to comply with his duties under the rules of law enacted to ensure safety and prevent accidents (Federal Court ruling of 02.08.2016, 6B 965/2014, recital 3).

The final complaint relates to Article 6 of the Convention, which concerns "the right to a fair hearing by an impartial and independent tribunal". The applicant complained that the domestic courts had not accepted new assessments of the body of evidence provided in one of the defendant's medical reports. As a result, her defence was placed at a disadvantage as regards the examination of evidence established by medical reports. The rules on the admissibility of expert opinions or evidence must not deprive the defence of the possibility of challenging them effectively, in particular by submitting or obtaining other opinions and reports. The case-law concerning Article 6 § 1 ECHR regards as a violation the refusal to authorise an alternative expert examination of material evidence (see Stoimenov v. the former Yugoslav Republic of Macedonia, no. 17995/02, §§ 38 et seq., 5 April 2007).

Nulla poena sine lege, as Article 7 of the ECHR states. In Switzerland, the absence of a provision condemning certain conduct does not mean that the same conduct should go unpunished. In this case, article 117 of the Swiss Criminal Code specifically criminalises homicide. The offence is certainly serious and there is no reason why it should go unpunished.

As a last resort, the mother appealed to the ECtHR to determine whether the driver was criminally liable.

Pending the decision of the Strasbourg judges, it is to be hoped that this case before the ECtHR will lead to clarification of the allocation of penalties to acts that should be punishable under criminal law.

Campos Kelly, Jayo Paul, Mariotti Maeva and Pelletier Eloïse

By Patrick Odier. Frmr Senior Managing Partner of Lombard Odier Group

Hosting the COP in 2026 would be a real project for Switzerland and the Swiss. It would also be an opportunity to innovate by proposing a more reasonable format adapted to environmental constraints and by better targeting the agenda on subjects in which Switzerland has particular expertise.

Concrete commitments for more impact

The 3rd edition of Building Bridges showed the way forward. Indeed, this international event gathered in Switzerland during four days, from October 3 to 6, 2022, more than 2000 participants from 51 countries and nearly 16,000 people connected to follow or participate in the 68 events of the program.

In fact, Building Bridges could represent a step in the preparation of a Swiss bid for the COP in 2026. Taking advantage of Switzerland's unique ecosystem, Building Bridges has brilliantly succeeded, with the support of our federal authorities, in bringing together actors from finance, international organizations, universities, NGOs, the public and private sectors and civil society towards a common sustainable goal.

Beyond good intentions, all these actors have mobilized to make concrete commitments to accelerate the sustainable transition. Thus, several initiatives already announced during the second edition of Building Bridges in 2021 have been launched: notably the "Swiss climate scores", adopted by the Federal Council in June 2022. They do not measure a company's ESG criteria, but its alignment with the carbon emission reduction target set by the Paris Agreements. In addition, many financial players are in the process of transforming their clients' portfolios according to their sensitivity to these sustainable issues.

Finance: an important lever to accelerate the transition

This year, two new organizations dedicated to solutions to save nature were announced at Building Bridges: Nature- Finance and Innovante for Finance. But we need to do more in terms of education, common language, political will, and investment to make a bigger impact faster.

Despite these real advances, progress is indeed not fast enough. In particular, the systems for rating companies to sort out and direct capital towards the most virtuous ones must be clearer and based on scientific and transparent foundations. But let's make no mistake, finance is not all-powerful. It can accompany, help and stimulate companies in their transition to a more sustainable economy, but it cannot replace industrial activity or government legislation. Let's not ask finance to say what is allowed or forbidden, nor to judge whether it is reasonable or not to use snow cannons at an altitude of 2000 meters. These choices must be made, argued and debated by the competent authorities.

Finance cannot and should not be the sole bearer of what are societal choices. Indeed, the financial sector desperately needs the leadership and ambition of policy makers and the real economy to have more impact. One of the challenges of COP27, which opens in early November in Egypt, will be the ability of political leaders to resist the temptation of short-term political gain, i.e., to focus on the political, economic and environmental benefits that could be reaped in years, not weeks.

Collective unpreparedness for extreme weather events, as well as unprecedented global anxiety about energy, food and commodity security, argue for a radical leap forward in the race to realign our economic system with the limits of our planet.

Aiming higher

The current economic growth model, with its significant collateral damage, must be rethought with the help of financial actors and all stakeholders. This is what Building Bridges is all about and it shows that this is possible. But Switzerland can and must aim higher, in the momentum of this event which has now proven its relevance.

Our country enjoys an unparalleled reputation in multilateralism, thanks to its diplomatic agility, its UN heritage and its neutrality. What has been accomplished in Switzerland in the service of humanitarian action and diplomacy is a universal reference. By hosting the COP in 2026, Switzerland would be in its place, at the center of the dialogue, to help ensure the necessary sustainable transition. ■

Source: Le temps.24.10.2022 www.letemps.ch Reprinted with permission of the author Patrick Odier

I.   Introduction

The Federal Act on the Acquisition of Real Estate by Persons Abroad (LFAIE; SR 211.412.41), also known as the Lex Koller, is a law which aims to limit the acquisition of real estate by persons domiciled outside the country in order to "prevent foreign ownership of Swiss soil".

This law varies according to the type of residence permit, the country of origin and the place of residence. Its operation is therefore complex. Moreover, the law changes according to the type of use one wants to make of it: secondary residence, main residence or holiday home. Foreign investors are not entitled to acquire residential property, but are still allowed to invest in commercial, craft and subsidised property.

The acquisition of a property subject to the authorisation regime requires the granting of an authorisation by the competent cantonal authority (art. 2, para. 1, LFAIE). Thus, the application of this law is first and foremost the responsibility of the canton in whose territory the property is located. It is the competent authority designated by the canton in question that decides whether a legal act is subject to authorisation and whether authorisation should be granted (art. 15, para. 1, letter a, FL). Authorisation is granted only on the grounds set out in the FL and, where applicable, in cantonal law (Art. 3, 8 and 9 FL).

II.  Conditions

In principle, three cumulative conditions must be met for a legal transaction to be subject to the authorisation regime:

- The purchaser must be a person abroad within the meaning of the FL (subjective liability).

- The object of the legal transaction must concern a property that is subject to taxation under the FL (objective taxation according to the use of the property).

- The acquired right must be assimilated to an acquisition of real estate under the FL (objective liability according to the type of right).

Even if these three conditions are fulfilled, further exceptions to the obligation to obtain authorisation in accordance with Art. 7 FL may apply.

III.   Persons abroad

The Lex Koller defines persons abroad in art. 5 para. 1 let. a and abis FL (supplemented by art. 2 OFL). These are foreigners domiciled abroad and foreigners domiciled in Switzerland, but who are not nationals of a member state of the European Community (EC) or the European Free Trade Association (EFTA), nor do they possess a valid C settlement permit.

This regime also applies to companies with headquarters abroad even if they are Swiss-owned and considered to be Swiss from an economic point of view.

IV. Holiday accommodation

A foreigner subject to authorisation may acquire a flat in an aparthotel or holiday home (Art. 9, paras. 2 and 3, and Art. 10 FL). The location of the accommodation must be designated as a tourist area by the canton in question. Each authorisation is subject to the annual quota allocated by the Confederation to the canton for holiday homes and flats in an aparthotel (art. 11 FL, art. 9 OFL and Annex 1 OFL), although there is an exception if the authorisation for the acquisition of this home or flat had already been obtained by the seller at the time.

Quota units may also be transferred to non-taxable persons to enable the sale of dwellings to foreign nationals (so-called "de principe" authorisations). Consequently, individual purchases by foreign nationals still require authorisation, but no longer have to be counted in the quota. Cantons and tourist municipalities may impose restrictions. For example, they may decide to block a location completely, or allow the purchase of multi-storey properties and only up to a certain quota, or limit the annual number of permits, or restrict the purchase of dwellings that are already in foreign hands (Art. 13 FL).

The following cantons allow the purchase of a holiday home or flat in an aparthotel: Appenzell Ausserrhoden, Bern, Fribourg, Glarus, Graubünden, Jura, Lucerne, Neuchâtel, Nidwalden, Obwalden, St. Gallen, Schaffhausen (only for flats in an aparthotel), Schwyz, Ticino, Uri, Valais and Vaud.

Holiday homes cannot be rented out on a year-round basis, but can only be rented out on a short-term basis. The purchaser must be able to use the accommodation himself in accordance with the purpose for which he has applied. The flats in a hotel apartment must be left at the disposal of the hotelier so that he can operate them as a hotel, especially during the high season (Art. 10, letter b, OAIE).

According to Art. 8 OAIE, holiday homes can only be acquired by natural persons directly in their own name; indirect acquisition of a home through a legal entity is not possible.

In principle, according to Art. 10, paras. 2 and 3, OAIE, the net floor area of a property may not exceed 200 m2 and the plot area 1,000 m2 (Art. 10, paras. 2 and 3, OAIE). In accordance with established practice, in the event of additional need, up to 250 m2 of net floor area and 1,500 m2 of plot area may be permitted, and in exceptional cases, higher excesses.

Mizgin CADIR, Alain AGUPYAN & Cassandra JOCHUM