Switzerland

A unit of the Swiss bank UBS has been placed under formal investigation in France following allegations that it designed investments to help its clients evade taxes, the International Herald Tribune reported. The move comes more than a year after an inquiry was opened regarding the bank’s operations in France, a UBS executive briefed on the matter said Sunday. A handful of UBS executives have been put under investigation since the inquiry began in 2012.

Switzerland is not a member of the 27-nation European Union and it has its own currency, pegged to the euro. It has escaped the worst of a crisis that has affected countries of the euro zone and charted its own course during the Continent’s economic downturn, the International Herald Tribune Rendezvous blog reported. Despite some public resistance to budget cuts, it has also avoided the sort of harsh austerity measures that the European Union authorities have imposed on member states fighting to reduce their mountains of debt.

Swiss voters on Sunday overwhelmingly backed a plan giving shareholders sweeping authority over executive pay, the latest in a series of moves aimed at curbing what is seen as excessive remuneration levels at top companies, The Wall Street Journal reported. Roughly 68% of those who voted supported the Minder Initiative, named after the businessman and politician who created it, according to the government. The 24-item measure enables shareholders of Swiss companies to approve or block proposed compensation for corporate executives and board members.

The Swiss government ordered banks to hold additional capital as a buffer against risks posed by the country’s biggest property boom in two decades, Bloomberg reported. Banks will be forced to hold an extra 1 percent of risk- weighted assets linked to domestic residential mortgages, the government in Bern said in a statement. Lenders would have to add about 3 billion francs ($3.26 billion) to comply with the new rules, which will be enforced from Sept. 30.

Credit Suisse Group AG will accept a debt restructuring plan that Vietnam Shipbuilding Industry Group put to its creditors, helping to resolve negotiations surrounding a default that occurred more than two years ago, according to a person familiar with the matter. The Swiss lender sent a letter to about 20 other creditors of the Hanoi-based company, telling them it plans to accept the proposal and outlining the rationale for them to do the same, said the person, who asked not to be identified because the matter is private.

Switzerland, for decades a paragon of safety in finance, is engaged in a high-risk strategy to protect its export-driven economy, literally betting the bank in a fight to contain the prices of Swiss products sold abroad, The Wall Street Journal reported. The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker.

Switzerland's oldest private bank yesterday admitted to helping Americans evade U.S. taxes, the first time a foreign financial institution has pleaded guilty to tax law violations, the New York Times DealBook blog reported today. Representatives for Wegelin & Company, a Swiss bank founded in 1741, acknowledged that for nearly a decade the firm helped dozens of wealthy American customers dodge taxes by hiding more than $1.2 billion in secret accounts. As part of guilty plea, Wegelin agreed to pay $74 million in fines, restitution and forfeiture proceeds to the U.S. government.

As times get tougher, discontent about Swiss tax breaks is mounting, Reuters reported in an analysis. Cash-strapped foreign governments have already chipped away at the secrecy that allows rich individuals to store tax-free funds in Swiss bank accounts. Now Europe's governments have turned the spotlight on the incentives Switzerland offers companies. Swiss official company tax rates of around 21 percent compare with 33 percent in France and 29 percent in Germany, according to a 2011 survey by accountants KPMG; often companies in Switzerland actually pay much less.

Switzerland-based trader Gunvor said on Monday that operations had resumed at its German Ingolstadt refinery, acquired from insolvent refiner Petroplus earlier this year, Reuters reported. Gunvor, which is co-owned by a Russian tycoon and chief executive Torbjorn Tornqvist, bought the 100,000 barrels per day plant in May from the insolvent Petroplus to build on its presence in Europe. "We intend to build upon the good and enduring customer relationships, and enlarge our trading activities in Germany and the Alpine region," said Tornqvist in an emailed statement.

Creditors of bankrupt refiner Petroplus's UK operations, mainly the Coryton refinery, will be paid a maximum of just 6.4 percent of their claims, said Steven Pearson, a joint administrator at PwC. The creditors will receive $102 million to $135 million, while their claims are estimated to total $2.1 billion to $2.4 billion, Pearson said on Tuesday. He said that losses of $22-$31 million, sustained in runnning the refinery between January and June, had reduced the amount available for distribution and demonstrated why he had to take the decision to close the plant down.