New transparency and due diligence requirements set to be introduced in Switzerland

New requirements closely follow EU and OECD rules, following rejection of more stringent requirements in November 2020

The Swiss Parliament has introduced a number of new transparency and due diligence requirements for companies, likely due to come into effect in 2023. Companies incorporated, or with a Head Office in Switzerland and are in the business of importing metals and other materials (minerals or metals containing tin, tantalum, tungsten or gold) from high-risk areas will be subject to due diligence and reporting obligations regarding their supply chain.

The same requirements will also be made of companies with products or services that are suspected to have come from child labour. Non-compliance can result in criminal liability, with those who provide false statements, or fails to provide a required non-financial report could be fined with up to CHF 100,000.

Companies affected will be those of public interest (such as banks, insurance companies etc) as well as other controlled companies, they should have at least 500 FTEs on annual average, and exceed either CHF 20 million of total assets or CHF 40 million of revenues. Companies that meet these criteria must report annually on non-financial matters.

These obligations originate from the European Union’s (EU) Regulation (EU) 2017/821, and the OECD’s OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

More stringent reporting requirements that were included in The Responsible Business Initiative – Protecting human rights and the environment which was rejected as it did not receive the necessary majority of cantonal votes, hence the counterproposal from the Swiss Parliament.

This initiative would have required companies to take on liability for their subsidiaries as well as suppliers with regards to internationally recognised human rights and international environmental standards. It would also require mandatory due diligence requirements and liability for damage caused by suppliers and subsidiaries.

Should no optional referendum be requested within 100 days after official publication of the Counterproposal in the Swiss Federal Gazette, the new ordinance will come into effect, likely in the financial year 2023.

For more information, contact Alpadis Group