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Swiss Government Signs Off On Tax, Trade Issues

Friday, November 30, 2018

Switzerland's Government has recently decided on a number of trade matters and reviewed its plans for changes to how it administers vehicle taxes.

Approval of trade deals with Ecuador and Turkey

On November 21, the Swiss Federal Council approved two trade deals signed on June 25: a new trade deal between the European Free Trade Association (EFTA, which comprises Switzerland, Liechtenstein, Norway, and Iceland) and Ecuador and a modernized trade deal with Turkey. The deals will now be submitted to the Federal Assembly for approval.

The EFTA-Ecuador FTA will lead to repeal of all customs duties on imports of industrial products, including fish and other marine products, originating in Ecuador. Ecuador will gradually eliminate or reduce customs duties on these products. The agreement also provides for tariff concessions on both basic and processed agricultural products.

The Turkish FTA already provides for full exemption from Turkish customs duty on industrial products but new provisions have been added on mutual recognition of conformity assessment, rules of origin, the protection of intellectual property, trade in services, and trade in sustainable development. It will also introduce additional concessions on processed agricultural products.

Restructuring of customs investigations units

The Government has also announced that the Swiss Federal Customs Administration is to be reorganized to improve its customs investigation remit. The Customs Investigation sections currently under the individual directorates of customs will be merged with the Central Customs Investigation section and the Criminal Matters and Appeals Division. Together they will form a new Main Customs Investigation Division. The Swiss Federal Council said that the reorganization is necessary in order to make the fight against smuggling and financial fraud more effective.

The FCA is the prosecuting authority and the authority that passes judgment in cases of violations of the Customs Act and 16 other federal acts. Its prosecuting powers are currently exercised by four district directorates of customs and the Directorate General of Customs.

Vehicle tax system reforms

Finally, the Swiss Federal Council has confirmed that it has decided not to fully do away with the motorway tax sticker and to instead supplement it with an electronic alternative that can be used on a voluntary basis. The adhesive motorway tax sticker was introduced in 1985.

The Council has proposed that, rather than completely replacing the adhesive motorway tax sticker system, vehicle owners should be free to decide whether they wish to continue to affix an adhesive tax sticker to their vehicle for the use of motorways subject to a toll or prefer to use an online system.

Those who opt to use the electronic version will be required to register their vehicle's number plate in the system via an online application. As before, checks will be carried out by the police and the Federal Customs Administration.

The Council has asked the Federal Department of Finance to prepare a corresponding dispatch by mid-2019.