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Revised provisions about dormant assets and assets without contact
The revised articles 45 to 59 of the Swiss Banking Ordinance on dormant accounts and the revised guidelines of the Swiss Bankers‘ Association on the treatment of assets without contact and dormant accounts held at Swiss Banks (guidelines on dormant accounts) have entered into force on January 1, 2015. The main amendments are set forth below in a nutshell.
1. New terminology and adjustment of the guidelines on dormant accounts to reflect the recent developments in the banking industry
All assets related to which the bank has not been able to establish any contact with the entitled persons (customer, heir or attorney) during 10 years since the last contact reflected in the files are now deemed to be “dormant”. According to the new terminology are such assets now prior to the lapse of said ten year period deemed to be “without contact” if there is no contact with the customers respectively its attorneys or the bank is not be able to contact the customer respectively its attorneys any more. In case the customer relationship is with an external asset manager or advisor becoming “without contact”, it is also deemed to be “without contact” with the bank if the asset manager/advisor informs the bank accordingly. A pure ebanking-customer relationship will be deemed “without contact” no later than three years since the last documented contact with the customer respectively since the last successful login-attempt. A customer relationship is in exceptional cases already earlier deemed to be “without contact” if assets are being transferred in the context of a liquidation of a bank and all required steps to re-establish contact with an entitled person have been without success.
2. Less stringent treatment of dormant accounts and accounts without contact
Banks will according to the revised provisions not be burdened with new material obligations. Most previous obligations applicable solely to dormant assets are now applied to accounts “without contact”.
a) Customer relationships deemed to be “without contact” can now easier be terminated
The guidelines on dormant accounts do now explicitly foresee a right for termination or a right for setting-off claims if the claims of the bank against a customer respectively its heirs being deemed “without contact” are not paid when due or not sufficiently covered anymore. This means thus in accordance with the literal interpretation of the provisions that a bank can now terminate any customer relationship deemed to be “without contact” if the bank has a claim due that cannot be fulfilled without assistance of any entitled person of the customer relationship deemed to be “without contact”.
b) Less stringent rules about the restructuring of dormant assets
The restructuring of dormant assets will from now on be subject to less stringent rules. Dormant accounts can as already set forth in Art. 37l Banking Act be transferred to another bank based on a specific written asset transfer agreement foreseen in the Banking Act. This possibility of transfer does generally not apply to assets deemed to be “without contact” – subject to the exception mentioned above. The asset transfer agreement must merely list the name of the entitled person and the assets transferred. The fact of the transfer of the assets will not be published, subject to the obligation to enter the customer of assets deemed to be “without contact” in a centralized data collection which can only be accessed by the banking ombudsman.
c) Publication of dormant assets that are more than 50 years „without contact“
The liquidation of very old dormant assets is now in the banks’ discretion. Customer data related to assets that are more than 50 years dormant must now by law be published either in the Swiss Commercial Gazette or on an electronic platform. Subject however to contradicting pre-eminent interests of the person affected. There is a publication period of 5 years for assets that have been “without contact” for more than 50 years since January 1, 2015. A notice period of one year starts running at the time of publication within which claims must be submitted that have to be examined by the bank on a case-by-case basis. The dormant assets that can be liquidated must be liquidated no later than two years after the lapse of the notice period respectively after it becomes clear that the submitted claims are not entitled. The rights of the entitled persons related to the assets cease to exist at the time of liquidation.