Greater legal protection for the trust business

Hague Trust Convention enters into force on 1 July 2007

Keywords: Private law

Press Release, FDJP, 04.04.2007

Berne. The imminent ratification of the Hague Trust Convention will create a firm legal basis for Switzerland's growing trust business. The Convention will enter into force on 1 July 2007. At the same time, on Wednesday the Federal Council enacted parallel amendments to Swiss federal legislation on international private law (the IPRG), and debt enforcement and bankruptcy (the SchKG).

Although trusts are already broadly recognized under current Swiss law, the present legal situation remains encumbered with considerable uncertainty. The recognition of trusts is thus being given a firmer foundation and greater legal certainty created for all concerned. Both the parties involved in trusts and the relevant authorities have a vested interest in a system that sets out with the greatest degree of certainty the legal provisions which apply to trusts in individual cases. There is also a significant economic interest in greater legal certainty, in particular, as a firm legal foundation creates a better climate for the setting-up and administration of trusts in Switzerland, and thereby boosts the country's appeal as a business location.

New regime

For these reasons, both chambers of the Swiss parliament voted unanimously to pass the Federal Council's motion that the Hague Convention be ratified by means of the law applicable to trusts and by its recognition. In addition to ratifying the Convention, the relevant federal resolution provides for an amendment to Swiss federal legislation on international private law (the IPRG), which currently contains no special provisions on trusts. The revision will guarantee that this law and the trust convention dovetail perfectly. Furthermore, the regime provided for by the Convention will be broadened to include provisions on the jurisdictions of Swiss courts and on the recognition of foreign decisions. In addition to the IPRG, the federal debt enforcement and bankruptcy act (the SchKG) will be extended to take account in Swiss debt enforcement proceedings of the distinction between the personal assets of the trustee and the trust.

For the complete documentation see the pages in German, French or Italian

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