Commentaries

The Federal Supreme Court decision 7B_1158/2024 of 18 February 2025 (not intended for publication) does not introduce any major new developments but constitutes an additional landmark in the maze of sealing procedures, in particular in the case of parallel procedures and the transmission of information between authorities. Following a report from FINMA, the FDF opened administrative criminal proceedings in March 2021 for breach of the duty of disclosure committed within a bank. In this context, the administrative authority requested various[...]

In judgment 7B_691/2024 and 7B_796/2024 of 7 February 2025, handed down by a panel of five judges but not intended for publication, the Federal Supreme Court (‘FSC’) confirms its recent case law on the application of seals under the new law (art. 264 para. 1 let. d) cum 248(1) 1st sentence CPP, cf. in particular Villard, cdbf.ch/1368). The Office of the Attorney General of Switzerland (OAG) is conducting criminal proceedings against two defendants. In this context, the OAG is conducting[...]

In a judgement published on 31 May 2024, the Federal Court had already confirmed that the fraudulent obtaining of a ‘COVID-19’ loan constituted fraud (ATF 150 IV 169, commented in Dupuis, cdbf.ch/1353). On the other hand, its case law was fluctuating with regard to the commission of the offence of forgery in relation to the presentation of the false credit application form to the lending bank. The judgement 6B_95/2024 of 6 February 2025, intended for publication, provided the answer of[...]

In a judgement 2C_219/2022 of 30 January 2025, intended for publication, the Federal Supreme Court (FSC) rejected a request for administrative assistance in tax matters submitted by Russia. The proceedings before the FSC had been suspended since 2022. Russia had sent a request for assistance to the Federal Tax Administration (FTA) in 2018 in order to identify the economic beneficiaries of dividends paid to Cypriot companies on three bank accounts opened in Switzerland and, if necessary, to reassess the amount[...]

The credit scoring company must explain to the person concerned the procedure and principles applied in practice to establish his or her solvency profile. Furthermore, the company's business secrecy does not preclude the communication of information to the authority or the court, which must weigh up the interests involved (judgment of the CJEU of 27 February 2025 in case C-203/22). A mobile phone operator refused to allow an Austrian national (CK) to conclude a mobile phone contract, which would have[...]

On February 19, 2025, the Federal Council sent the message to Parliament concerning the project to extend the automatic international exchange of information in tax matters (AIE) to crypto-assets (the Message) by adopting a framework for the declaration of crypto-assets (CDA). In addition to the CDC, the Message proposes additions and amendments to the law (P-LEAR) and the ordinance (P-OEAR) on the automatic exchange of information. The new rules are expected to come into force on January 1, 2026, for[...]

A customer who receives notice of a fraudulent direct debit commits a fault if they do not dispute it. This fault interrupts the causal link between the bank's serious fault and the damage (4A_610/2023). A Liechtenstein foundation manages the assets of a prince. Its headquarters are at a law firm in Liechtenstein. A lawyer from this firm is a member of the foundation board with joint signature with the prince. The foundation opened an account with a bank in Geneva.[...]

Following on from the EU's General Data Protection Regulation (GDPR), the European Regulation on Intelligence artificial (AI Act) provides for a broad territorial scope, covering not only companies incorporated within the EU, but also some located in third countries such as Switzerland. Swiss financial intermediaries may therefore be affected by the AI Act, the extraterritorial dimension of which is presented in this commentary. A. Criteria for determining the territorial scope of the AI Act We will discuss here the two[...]

A borrower who uses the loaned funds for a purpose other than that specified in the contract may exceptionally be found guilty of breach of trust (Art. 138 para. 1 of the Swiss Criminal Code). For this to happen, the purpose for which the assets were lent must be clearly defined in the contract, which was not the case in ruling 6B_240/2024 of 9 January 2025. On the basis of a loan agreement , a company lends USD 300,000 to[...]

In a ruling intended for publication, the Swiss Federal Supreme Court, against the advice of the Federal Tax Administration, exempts a holding company from stamp duty (i) in the case of an intra-group transfer of shareholdings that do not meet the restructuring conditions set out in the LIFD and (ii) following the granting of shareholdings to employees free of charge (9C_168/2023, 9C_176/2023 of 25 November 2024). The case concerns a holding company carrying out two transactions which the Federal Tax[...]

In judgment PS240181 of 14 November 2024, the ZurichObergericht ruled that art. 44 of the Swiss Criminal Code applies by analogy to asset freezing measures taken under the Embargo Act and its implementing ordinances, despite the absence of any reference to the Embargo Act in art. 44 of the Swiss Criminal Code. It follows that realisation under the LP is not possible as long as the assets are frozen. On 6 June 2023, a creditor with an enforceable judgment from[...]

Following a merger, the acquiring company may be condemned by the SIX for a violation committed by the transferring company. In addition, the CEO's conviction must be announced, even if it concerns acts committed within another company (award (final) by the SIX Court of Arbitration of August 26, 2024). A managing director and CEO of a company listed on the SIX is convicted of professional fraud and disloyal management within another company. The listed company merges with another company (acquiring[...]

Banks and financial institutions are increasingly integrating artificial intelligence (AI) into their internal services and processes (see e.g. Jotterand, cdbf.ch/1377). In particular, this use can present operational, legal and reputational risks (see e.g. Levis, cdbf.ch/1380), as well as a growing dependence on third-party suppliers, especially for AI models and cloud services. Added to this is the difficulty of assigning clear responsibilities in the event of errors in the AI system or model. The use of AI by banks and financial[...]

The Swiss Federal Supreme Court recently handed down a new ruling on the subject of fraudulent bank orders, in which it annulled a cantonal decision on the grounds that it did not address all the issues raised by the plaintiff (ruling 4A_135/2023 of October 16, 2024). Although this ruling mainly concerns questions of civil procedure, it nevertheless serves as a useful reminder of the scope of the examination that the court must undertake in the presence of fraudulent orders. In[...]

The European Regulation on Artificial Intelligence (AI Act) adopts an approach based on the risks that an artificial intelligence system (AIS, cf. Caballero Cuevas, cdbf.ch/1382) may pose to the health, safety and fundamental rights of individuals. AIS are divided into four categories, respectively AIS presenting an unacceptable risk, AIS presenting a high risk, AIS presenting a limited risk and AIS presenting a minimal risk. This commentary focuses on the first three categories of AIS. A. AIS presenting an unacceptable risk[...]

In our last commentary on a Federal Court ruling on sealing (7B_313/2024, intended for publication), we stated that ‘banking secrecy no longer constitutes a ground for sealing where it is invoked by a third party, i.e. a person not involved in the criminal proceedings’ (Villard, cdbf.ch/1383). Following the publication of judgment 7B_976/2024, which is commented on here, the second part of the statement should be deleted: banking secrecy no longer constitutes a ground for sealing. Ruling 7B_976/2024 was not concerned[...]

A lawyer specializing in banking law, who agrees with his client that he will receive banking correspondence on his behalf, should be able to detect the unusual nature of fraudulent orders. If he fails to do so, he may incur contractual liability and must compensate the client (4A_269/2024). A Geneva lawyer specializing in banking law sets up and manages a Panamanian company for a French businessman. The company opens a bank account in Geneva. The contract stipulates that correspondence is[...]

The development of artificial intelligence (AI) has become an issue of global importance. AI is now used not only in industry, but also in the service and entertainment sectors. Robots can help lawyers, doctors, bankers, brokers, nurses, farmers, social workers or even artists. The increased use of AI is having a positive effect, as robots can now replace difficult, repetitive or even dangerous activities (such as cleaning up polluted sites) and boost productivity. However, its impact on the future of[...]

On 21 November 2024, the International Organisation of Securities Commissions (IOSCO) published a consultation on the practice ofpre-hedging. Pre-hedging vs front-running Pre-hedging must be distinguished from front-running, which is prohibited as an unfair practice. Front-running consists of a financial institution executing proprietary transactions prior to a client's transactions, to the client's detriment, with a view to exploiting future price fluctuations in the client's favour. Unlike front-running, pre-hedging enables securities firms to hedge their exposure to client orders in advance. Pre-hedging[...]

On September 18, 2024, the First Civil Chamber of the French Court of Cassation handed down ruling no. 23-13.732, which addresses the notion ofactivity directed towards a Member State within the meaning ofart. 17, § 1, c) of the Brussels I bis Regulation (RBI bis), in the context of banking services rendered by a Lebanese bank to a customer resident in France. This decision confirms that customers based in the EU who enjoy “consumer” status may bring their claims before[...]

Artificial intelligence (AI) can prove invaluable in the human resources management of a bank or financial services provider. Employers can use it to automate various tasks, such as sorting applications, assessing performance, issuing warnings and even dismissals. These practices raise various legal questions: to what extent can an employer rely on AI for such tasks? Can employees challenge the use of AI on them, or obtain explanations of the criteria used by AI? In Switzerland, there are no regulations specifically[...]

Since the revision of the Code of Criminal Procedure, which came into force on January 1, 2024, banking secrecy no longer constitutes a ground for sealing documents when invoked by a third party, i.e. a person not involved in the criminal proceedings. The Swiss Federal Supreme Court ruled to this effect in its ruling 7B_313/2024 of September 24, 2024, intended for publication. The Office of the Attorney General of Switzerland was conducting criminal proceedings for fraud and money laundering against[...]

The European Regulation on Artificial Intelligence (AI Act) has been in force since 1 August 2024 (see cdbf.ch/1359/). It applies both to artificial intelligence systems (AIS) and to general-purpose AI model (art. 2 AI Act). This commentary focuses on the definitions of these two key concepts in the application of the AI Act and attempts to highlight their characteristics and specificities. A. The concept of SIA According to art. 3 ch. 1 AI Act, an AIS is “machine-based system that is[...]

A bank can benefit from guarantee clauses stipulated in the standard contracts of suppliers of AI systems. These clauses provide for compensation in the event of infringement arising from the use by such systems of training data protected by intellectual property rights. This commentary examines the scope of such clauses, their conditions and the possible need to extend their benefit to third parties to the initial contract. The quality of the responses provided by AI systems depends in particular on[...]

In ruling 4A_394/2024 of 18 September 2024, the Federal Supreme Court confirms the inadmissibility of a clear-case application to debit the account of a client subject to sanctions, in order to pay his lawyer's fees. A client held several bank accounts in Switzerland, in particular with a bank whose group was also active in Europe and the United Kingdom. The client is subject to sanctions in connection with the conflict in Ukraine, and his assets have been frozen by Switzerland,[...]

Cross-border financial market supervision and effective international cooperation are essential for the stability and integrity of the world's financial markets. To this end, the Federal Council has just launched a consultation on amendments to the Financial Market Supervisory Authority Act (LFINMA), the Audit Supervision Act (ASA) and the Swiss National Bank Act (NBA) to adapt the Swiss legal framework to the current conditions for international cooperation. This commentary focuses exclusively on the proposed amendments to LFINMA. The preliminary draft seeks[...]

Recent advances in generative artificial intelligence (AI) have rekindled financial players' interest in chatbots for managing customer relationships. According to a report by the US Consumer Financial Protection Bureau (CFPB) published in 2023, around 37% of Americans interacted with a banking chatbot in 2022, and all the major US banks are using them. However, their deployment raises many questions. Some of these are not new, particularly concerning the management of data and subcontractors; others are more specific to the technology[...]

The members of the board of trustees of a pension fund must draw up the investment strategy and organise and supervise its implementation. If they fail to do so, in particular if they conclude a discretionary mandate without any investment strategy and without supervising the investment manager, the members will incur civil liability (9C_496/2022, 9C_503/2022, 9C_504/2022, 9C_505/2022). A pension fund for a nursing home in Fribourg decided to enter into a discretionary management contract with an asset management company. The[...]

ChatGPT and GenAI - these new words have been part of our daily lives since November 2022, and we no longer need to introduce them. The growing use of artificial intelligence (AI) in the banking sector raises complex legal and regulatory issues. How do you navigate the world of AI when you are active in the financial sector in Switzerland? The starting point is to understand the existing legal and regulatory framework. To date, there are few laws specifically governing[...]

The overview of the “ leading cases ” of the Swiss Banking Supervisory Commission (hereinafter: the Commission) for the1st half of 2024 is now available. Among the few decisions mentioned, we would like to highlight two. In the first ([533/60]), it is recalled that underart. 18 of the investigation regulations of December 16, 2019, the bank is obliged to cooperate in establishing the relevant facts when an investigation procedure is opened against it. In the case in point, the reporting[...]