Bilateral Accords Take Effect In Switzerland

by Ulrika Lomas, Tax-News.com, Brussels

03 June 2002

The first set of bilateral accords between Switzerland and the European Union came into effect on Saturday, marking the start of a new era for the Alpine jurisdiction.

The agreements, which cover free movement of labour, land and air transport, agriculture, research and development, and the removal of technical barriers to trade, were approved by Swiss voters in a referendum held in May 2000. However, the most contentious accord - on free movement of labour - then needed to be ratified by each EU member state individually, and a final agreement was not reached until April this year.

The AFP news service reported last week that the agreement on free movement of labour will be phased in over a period of 12 years, and that although from 2004 Swiss nationals will be able to work in any EU member country and enjoy the same rights as citizens of that country, the Swiss work permit quota system will remain in place for five years, and the jurisdiction will be allowed to reimpose quotas at any time after that if the influx from EU member states becomes too great.

According to AFP, the agreement must be reconfirmed in 2009, and there is the possibility that another referendum could be held in Switzerland on the issue then.

The bilateral accords which came into effect at the weekend were hard fought, and required four years of difficult negotiations to draw up. Talks on the second set of agreements, dubbed 'Bilaterals II', look set to be equally problematic, and there is currently deadlock over the Swiss refusal to loosen banking secrecy provisions in order to allow exchange of information on the taxation of savings interest for EU residents.

Experts have suggested that the concessions made by the 15 nation bloc in order to secure the first set of agreements may mean that the European Union is less willing to budge on contentious issues raised during the second round of negotiations.

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