On 1 January 2019, certain changes to Swiss debt enforcement and bankruptcy law will enter into force. The revised law aims to offer better protection for debtors against unjustified debt enforcement steps and to facilitate the recognition of foreign bankruptcy proceedings.

Restriction on disclosure in debt enforcement register

Starting point

Avoidance Actions – What are they?

Debtors may be tempted to protect assets from access by a possible foreclosure. The avoidance action (also called "Pauliana") gives the bankruptcy administration, and under certain conditions the creditors, the opportunity to challenge such legal acts of the debtor. Upon approval of the actions, the assets will be foreclosed.

Although Switzerland recently decided to facilitate the financing activities of groups operating in or out of Switzerland by easing some restrictions under the Withholding Tax Ordinance, the rather stringent requirements regarding group financings according to corporate law, as well as the rules under banking law and bankruptcy law, remain the same.

Der Basler ZPO-Tag 2017 vom 3. November 2017 (Programm) befasste sich mit aktuellen praktischen Fragen und Neuerungen rund um die verschiedenen zivil-prozessrechtlichen Verfahren und die Vollstreckung. Für Gläubiger wie auch Schuldner sind insbesondere der Wegfall des Gefährdungserfordernisses beim Arrest gestützt auf Urteile sowie neue Tendenzen bei der Verjährungsunterbrechung durch Betreibung von Bedeutung.

The Swiss government presented a draft bill in May 2017 which was approved by the Swiss Council of States in December 2017 with very few amendments. The revised law could be effective as from 1 January 2019 if the Swiss National Council approves the revision this year.

Key changes include:

On 16 March 2018, the Swiss Parliament adopted the revision of the international insolvency provisions of the Swiss Private International Law Act ("PILA"). Such revision particularly aims at simplifying the recognition of foreign insolvency proceedings in Switzerland which shall lead to a reduction of costs and improved efficiency. The revised PILA is now subject to an optional referendum.

April 2018

121Newsletter No.

Although implementation period of Swiss contractual stay requirements ends, FINMA accepts partial conversion for a limited time under certain conditions: FINMA has announced on 21 March 2018 that for a limited period until 1 January 2019 for contracts with domestic and foreign banks and securities dealers and until 1 July 2019 for counterparties other than banks and securities dealers to accept if banks forego declaring a trade stop in order to achieve full compliance with the Swiss contractual stay requirements.

Insolvency and international cooperation in insolvency matters have been subject to recent developments, particularly in the European Union but also internationally, as mandated by the UNCITRAL. Switzerland however, did not participate in these modernization processes, except in the banking field. Switzerland has now adopted modern and competitive regulations, thereby unifying the entire applicable legislative system.

1 GENERALITIES

Article 149a of the Swiss Law on Debt Collection and Bankruptcy (SchKG) provides that claims based on a loss certificate become time-barred within 20 years after the date of its issuance. According to the transitional provisions, this time limit applies equally to loss certificates issued prior to the enactment of article 149a which came into force on 1 January 1997.1 Prior to that change in the law, claims based on loss certificates were not subject to prescription.