The Swiss Confederation

The Swiss Confederation

History of Relations

Never having imposed sanctions against South Africa (other than adhering to UN arms and oil embargoes), the Swiss, however, demonstrated solidarity with international efforts to end Apartheid by limiting capital investment and enforcing punitive debt repayment schedules. There have recently been increasing calls by NGOs, such as Jubilee 2000, for Swiss companies to pay compensation to the victims of Apartheid.

High level reciprocal diplomatic representation dating back several decades (since 1952), open free access to government and private sector institutions, as well as strengthening trade relations, have provided the basis for excellent bilateral relations between the two countries. Following South Africa's democratic transformation and in view of the commonality of shared interests in the international system and on the African continent in particular, both countries enjoy a privileged status on each other's foreign policy agenda.

Diplomatic Representation

South African Representation in Switzerland

H E Ms D S Mthembi-Mahanyele
Ambassador Extraordinary and Plenipotentiary

South African Embassy

Swiss Representation in South Africa

H E Dr N Brühl
Ambassador Extraordinary and Plenipotentiary

Pretoria (Embassy)

Travel Info

Visa Requirements for South Africans

For more information contact the Embassy of Switzerland.

Health Requirements

Proof of a medical insurance must be produced prior to departure from South Africa. There is no immunization against DHF (Dengue Fever).

For further information go to Travelers' Health.

Climate

Switzerland is cold in winter and the summers are mild.

For up-to-date weather information click here.

Currency Info

The monetary unit is the Swiss Franc (CHF). The currency is freely convertible.

For current exchange rates click here.

State and Official Visits / Bilateral Meetings

No Information

Bilateral Agreements

If you have any queries with regard to treaties please contact the Treaty Section of the Department of International Relations and Cooperation (DIRCO) at 012 351 1000.

Trade Info

For current information on trade statistics between South Africa and Switzerland, visit the website of the Department of Trade, Industry and Competition of South Africa.

Interest Groups and Information

Arts and Culture
Pro Helvetia, the Swiss National Foundation for Arts and Culture based in South Africa.

Business Organisations
Swiss Business Council

Chamber of Commerce
Chamber of Commerce and Industries Southern Africa Switzerland
Tel: 011 557 5978
Fax: 011 978 9947

Country Profile : The Swiss Confederation

Table of Contents

1. Representation

1.1 South African Representative
1.2 Swiss Representative

2. Statistical Profile

2.1 General
2.2 Economic Indicators
2.3 Social Indicators
2.4 Political Indicators

3. General Background

3.1 Location
3.2 Time Zone

4. Political Structure

4.1 National Legislature
4.2 Electoral System
4.3 Head of State
4.4 National Government
4.5 State Legislature
4.6 Political Parties
4.7 Judicial System

5. The Swiss Economy

5.1 General
5.2 Trade
5.3 Government Finances
5.4 Employment

6. Swiss Foreign Policy

6.1 The Modernisation of Switzerland's Foreign Policy
6.2 Overview of Swiss relations with Africa
6.3 Overview of Swiss relations with the United Nations
6.4 Overview of Swiss relations with the European Union

7. Relations with South Africa

7.1 Political Relations
7.2 Economic Relations
7.3 Swiss Development Assistance

Annex A : List of members of the Swiss Federal Council (Cabinet)

Annex B : List of Bilateral Agreements

1. Representation

South African Representative:	Dr Konji Sebati (Ambassador)
	(Accredited 9 Sept 2005)
	South African Embassy
	Alpenstrasse 29
	3006 Bern

	Tel : (09-41) 31 350 1313
	Fax : (09-41) 31 350 1311
	E-mail : ambassador@southafrica.ch
	Web page : www.southafrica.ch

Swiss Representative:	Mr Victor Christen (Ambassador)
	(Accredited Aug 2004)
	Embassy of Switzerland
	225 Veale Street
	Parc Nouveau
	New Muckleneuk
	Pretoria 0181

	Tel : (12) 452 0660
	Fax : (12) 346 6605
	E-mail : Vertretung@pre.rep.admin.ch
	Web page : www.swissembassy.co.za

2. Statistical Profile

2.1 General

Capital:	Berne

Official languages:	German (63.7%)
	French (20.4%)
	Italian (6.5%)
	and Romansh (1%)
	These are all national languages but only the first 3 are official languages.
	In addition to the four official written languages, the majority of German citizens speak Swiss German which is not a written language.

Land area:	41 290 sq km (10% arable, 28% pasture and 32% forest)

Population:	7, 489,370 (July 2005)

Time:	GMT + 1 hour

2.2 Economic indicators

National currency:	CHF or Sfr = Swiss Franc

Exchange rate / Rand:	R1 = CHF 0.1922 ( 2005)
Exchange rate / US$:	US$ = CHF 1.2828 (2005)
Exchange rate / EUR:	EUR= CHF1.5419(2005)
Exchange rate / GBP:	GBP= CHF 2.2693(2005)

Inflation rate:	0.9 (2004)

GDP (CHF):	327.4 billion (2004)
GDP growth rate:	1.8%(2004)
GDP per capita:	CHF 43,700 (at constant prices as for 2004)

Total Swiss Trade
Exports:	CHF 167.296 billion (2004)
Imports:	CHF 200.448 billion (2004)

SA / Swiss trade:	CHF 1.38 billion (2003)
SA Exports to Switzerland:	CHF 862 million (2003)
SA imports from Switzerland:	CHF 523 million (2003)

Unemployment rate:	3.4% (2004)

2.3 Social indicators

Age profile :	0-14 years (16.6%)
	15-64 years (68%)
	65 and above (15,4%)

Life expectancy:	83,36 years - female (2004)
	77,58 years - male (2004)

Religion:	Roman Catholic (41.8%)
	Protestant (35.2%)
	Other (13%)
	(Census 2000)

2.4 Political indicators

Political system:	Confederation (founded in 1291)

Official name:	Swiss Confederation

Form of government:	Federal Republic (since 1848)

Political / econ. orientation:	Democracy / Free market

Military affiliation:	Permanent Armed Neutrality

Ruling party:	Coalition SPS/SVP/FDP/CVP

Legal system:	Based on 1874 Constitution, civil law system

3. General Background

3.1 Location

Switzerland is a federal state in central Europe. It is a landlocked country country bordered by Germany to the South, Austria and the Principality of Liechtenstein to the East, Italy to the South and France to the West.

The largest towns in terms of population are:

Zurich	338.6 thousand
Geneva	171.2 thousand
Berne	124.4 thousand
Lausanne	114.0 thousand

3.2 Time Zone

Switzerland is 1 hour ahead of Greenwich Mean Time. During Summer, Switzerland switches to daylight saving in March; all clocks are set forward by one hour (GMT + 02:00) until in October when all clocks are readjusted to normal time.

4. Political Structure

4.1 National Legislature: Bicameral Federal Parliament.

The Parliament has two chambers elected for four years. The 200 members of the National Council (Nationalrat) are elected directly by proportional representation. The Council of States of 46 members represents the 20 cantons and six half-cantons. Each of the cantons sends two councilors and half-cantons each one councilor, elected by the people in various ways depending on the cantonal constitutions. Any law passed by both houses may be submitted to a referendum if demanded by eight cantons or 50 000 citizens.

The 26 Swiss cantons are: Zurich, Bern, Vaud (Lausanne), Aargau (Aarau), St Gallen, Geneva, Lucern, Ticino (Bellinzona), Valais (Sion), Solothurn, Basel-Land (Liesthal), Fribourg, Thurgau (Frauenfeld), Basel-Stadt, Graubunden (Chur), Neuchatel, Schwyz, Zug, Schallhausen, Jura (Delemont) Appenzell-Ausserrhoden (Herisau), Glarus, Uri (Altdorf), Nidwalden (Stans), Obwalden (Sarnen) and Appenzell-Innerrhoden (Appenzell).

4.2 Electoral system: Universal adult suffrage (age 18)

Last election : October 2003
Next election : October 2007

4.3 Head of State

The de facto Head of State is the President of the Federal Council, although constitutionally this role is fulfilled by the Council as a whole. The Presidency rotates annually. The current President is Mr Samuel Schmid.

4.4 National Government

The Federal Council (cabinet) is the executive authority, consisting of seven members elected for a four-year term by, but not necessarily from, the federal legislature. The President and Vice-President are elected from the ranks of the Federal Council for a one-year term which is not immediately renewable.

Federal Council posts are shared by parties that constitute the ruling coalition by a so-called "Magic Formula" that destines which party may fill vacancies and prescribes which canton or language group is represented etc. According to this formula, each of the three main parties (the Social-democratic party, the Radical Democratic Party and the Swiss People's Party has two representatives, and the fourth party (the Christian Democratic Party) has one representative in Cabinet.

4.5 State Legislature

Each of the 26 cantons has a parliament elected by universal suffrage and a government whose organisation varies from canton to canton. In a few cantons the principle of universal sovereignty is exercised directly through assemblies of all voters. The cantons are sovereign in all areas not specifically entrusted to the federal government.

4.6 Political Parties.

Parties share power in a permanent coalition that has been in existence since the beginning of the century. A center-right coalition of four parties retained power in the October 2003 parliamentary elections.

The Conservative Swiss People's Party (SVP) has emerged as the strongest party in the 2003 elections, marking a significant concentration of conservative-nationalist power for the first time in decades.

From a poll perspective, the SVP tabled 27,7% of the votes (55 seats), the Social Democratic Party (SP), 22,48% (52 seats), the Free Democratic Party (FDP), 16,8 % (43 seats), the Christian Democratic Peoples Party (CVP), 14,3% (35 seats) and the Green Party 4,96% (9 seats).

The four largest parties are grouped in the same Grand Coalition that has governed Switzerland since 1959. Switzerland's mix of direct voting and proportional representation means that the party with the most votes does not necessarily get the most seats.

Percentage polls are traditionally relatively low (35-40%). The voter turn-out for the 2003 elections was 44,5%, up from 43.3% in 1999.

The following parties are represented in the government:

4.6.1 The Social Democratic Party (SPS)

The SPS has 51 members in the National Council and 6 members in the Council of States. Being the largest political party in Switzerland, the SPS derives its membership from a fairly broad ideological spectrum. The party supports EU membership for Switzerland.

The SPS is led by Mr Hans Juerg Fehr.

4.6.2 The Free Democratic Party (FDP)

The FDP has 43 members in the National Council and 18 members in the Council of States.

The party inherited the mantle of the original Liberal Party, which was the leading party from 1848 to 1900. The party stands for the principle of a strong federal power, while respecting the legitimate rights of the cantons and all the minorities.

Ms Marianne Kleiner-Schlaepfer is the president of the FDP.

4.6.3 The Christian-Democratic People's Party (CVP)

The CVP has 28 members in the National Council and 15 in the Council of States. The party developed from the original conservative opposition and gained votes with the support of the Roman Catholic Church. The party features strongly in traditionally Catholic cantons. Policies include a Christian outlook on world affairs, federalism and Christian social reform by means of professional associations. The president is Ms Doris Leuthard.

The party is represented by Federal Councillor Joseph Deiss in parliament.

4.6.4 The Swiss People's Party (SVP)

The SVP has 55 members in the National Council and 8 in the Council of States. As with the FDP, the SVP developed from the liberals and has a strong farmer and small business base. The center-right SVP has a largely anti-EU policy. The president is Mr Uli Maurer.

The party is represented by Federal Councillor Blocher and Schmid in parliament.

4.6.5 Other parties

Other parties which do not have representatives in the Federal Council are parties such as the Green Party, Liberal Party, the Ticino League and the Swiss Democrats.

4.7 Judicial System

While Switzerland has enjoyed a common Civil Code since 1912, the Penal Code was only unified in 1942. Under the Code, capital punishment was abolished by the few cantons which still retained it. The individual cantons continue to elect and maintain their own magistracy and retain certain variations in procedure.

The Federal Court sits in Lausanne. The Court is comprised of 30 judges elected for a six-year term by the Federal assembly. All three official Swiss languages must be represented in the Court. The President of the Federal Supreme Court is elected by the Federal Assembly for a two-year term, with no possibility of re-election, from the senior judges of the Court.

5. The Swiss Economy

5.1 General

For most of the 1990's Switzerland counted among Western Europe's weakest performing economies with Gross Domestic Product growth averaging around zero percent between 1990 and 1997. The economic recovery, which began during the second half of 1997, gained steady momentum and continued in the positive territory throughout 1998 (2.4%), 1999 (1.5%) and 2000 (3.2%). Initially fuelled by a stronger demand for Swiss goods from both Europe and the US, the growth seen during the latter part of the 90's peaked towards the end of 2000. Affected by a combination of internal (collapse of Swissair) and external (September 11, 2001) factors, 2001 registered subdued growth of just 0.9%, with the downturn most noticeable in exports and investment in plant and equipment. In 2002 the Swiss economy came to a standstill, registering a 0.2% real increase in GDP - a development characterised by a decline in domestic demand / investment, decreasing imports and stagnating exports. In 2003, the first 2 quarters showed negative growths, but first indications of a trend reversal appeared in Q3 with a small growth of 1%.

The Swiss economy is currently looking in much better shape than it has done in recent years. GDP figures in the first quarter of 2004 and almost all leading indicators point towards considerable momentum.

Trade

The Swiss export industry increasingly suffered from the global slowdown during 2001, leading to a 2.9% real growth, as opposed to a 7.5% growth in 2000. The economic slowdown in Switzerland also undermined the demand for goods from abroad in 2001, with real imports growing by only 1.1%, compared to a 7.5% rise the year before. In 2002, the ongoing economic downturn, combined with a sharp appreciation of the Swiss Franc, resulted in a decline of imports by 2.5% and weak export growth of just 1.8%.

Foreign trade in 2003 was held back by sluggish international economic development as well as the weak dollar. Overall imports grew by a mere 1% in real terms while exports only rose by 0.1% (real). However, the last quarter showed clear signs of accelerated growth.

Due to an environment of increasing economic activity, Swiss foreign trade in the first semester of 2004 showed a growth dynamic unseen in years. Exports rose by a healthy 10.2 % nominally and 7% in real terms, respectively - the best result since the first semester 2000. With one exception, all sectors increased their trade activities, with regionally strong growths in transformation markets.

Imports increased by 6% (nom.) or 5.3% (real), the highest result since the first half of 2001. Of all categories, capital investment registered the strongest growth, a positive indicator of recovery of the domestic economy.

5.3 Government finances

Despite the Swiss Government's commitment to achieve long-term fiscal consolidation, the worsening economic environment and the collapse of SwissAir led to a deterioration of government finances. The Federal Government budget deficit for 2002, excluding unplanned receipts of CHF 3.7 billion from the sale of Swisscom shares, stood at a record CHF 3.3 billion. A comprehensive program to reduce the deficit over the next years was drawn up and passed in 2003, which by 2006 should relieve the federal budget by about CHF 3 billion.

5.4 Employment

On the labour front, employment grew by an average of 0.4% in 2001 compared to a 1.6% rise in 2000. The decline in unemployment, which was evident since mid-1997, stagnated during the first half of 2001 and started to increase by the latter half of the year. Overall, the unemployment rate for 2001 averaged 1.9% and rose to 2.8% in 2002. By the first half of 2003, the rate had risen to 3.6% and continuously rose to a record 4.1% in December. The yearly average was 3.7%, an increase of 45% over the previous year.

Forecast: Although the long awaited upturn has now materialized, the Swiss employment market appears as yet unimpressed by the upbeat economic mood. The seasonally adjusted unemployment rate has remained just below the 4% mark. The forecast for the unemployment rate is estimated at 3.4% in 2004.

6. Swiss Foreign Policy

6.1 THE MODERNISATION OF SWITZERLAND'S FOREIGN POLICY

Switzerland's foreign policy, which traditionally has been primarily based on its position of permanent armed neutrality, has undergone a fundamental revision over the past decade. Until the late eighties, Switzerland's foreign policy was considered to be static, predicated as it was on the traditional maxims of Neutrality, Solidarity, Universality and Approachability. Although these guiding principles are still relevant today, Switzerland realised that in an increasingly globalised world with a multitude of state and non-state actors and changing power blocks, the aforementioned principles needed to be re-evaluated so as to determine their relevance in terms of the new international reality and would have to be adapted to serve Switzerland's own national interests and international objectives into the new century.

Switzerland has gradually come to realise that the principle of neutrality, which is deeply rooted in Swiss society, has undoubtedly lost some significance in an increasingly globalised international community. Instead of the concept of permanent armed neutrality, Switzerland is now looking at a system of "flexible neutrality", which would allow for a more active role in international politics without compromising its sovereignty.

The principle of Approachability, which has particularly manifested itself through Switzerland's willingness to offer its international services and good offices for the resolution of conflicts, etc., has, as a result of its foreign policy overhaul, also experienced fundamental changes. Although Switzerland, as before, still provides international good offices, it now does less so on a bilateral basis and increasingly more so through participating in multilateral programmes (e.g. UN agencies, etc.).

The need for repositioning Switzerland's foreign policy came about as a result of three factors that were identified by the Swiss government. Firstly, the realisation that foreign policy has to take account of an increasing number of terrains of international cross-border activity that also have an increasing direct impact on the domestic political scene (e.g. communication, transport, environment, etc.). Secondly, as a result of the inevitable demands placed on national decision-making by the increasing globalisation of problems and the regionalisation of problem solving. Finally, the realisation that Switzerland's traditional foreign policy tenets could not accommodate the increasing number of international actors that were influencing the international political system.

Flowing from the aforementioned realisation of changing international realities, the Swiss government decided that Swiss foreign policy should be able to meet the following six criteria, namely, it must:

i. be objective orientated;
ii. set priorities;
iii. have a holistic approach;
iv. be able to pursue several simultaneous objectives;
v. be flexible in order to accommodate rapid changes; and
vi. be orientated towards solving key international conflicts.

As a result of the reappraisal, Swiss foreign policy has, furthermore, set itself five key objectives, namely:

i. The maintenance and pursuit of international peace and security.
ii. Promotion of human rights, democracy and the Rule of Law.
iii. Promotion of international prosperity.
iv. Elimination of social disparities.
v. Protection of the environment.

Switzerland's foreign policy has, therefore, over the past few years undergone a radical shift away from its traditional static posture regarding international engagement, to a more proactive approach that takes into account the realities of the modern international political and economic situation. These approaches do not, however, only represent a challenge for Swiss policy makers and the Swiss electorate, but, given Switzerland's unique international position and foreign policy objectives, also present an opportunity to South Africa to engage Switzerland in a manner that will benefit our own national and international interests.

6.2 OVERVIEW OF SWISS RELATIONS WITH AFRICA

Due to Switzerland's unique international position and role in promoting peace, stability dialogue and humanitarian issues, Switzerland is actively involved in supporting these issues on the African continent. It is, therefore, involved in numerous projects aimed at promoting security, stability and humanitarian issues in Africa. Apart from its relations with South Africa, Switzerland's interests in Africa are generally confined to the aforementioned issues, with very little emphasis on economic interests.

Some of the main issues on which Switzerland remains seized in Africa include the following:

i. De-mining

Switzerland is very active in de-mining efforts in Angola and Mozambique and has also contributed CHF20 000 (R80 000) towards the OAU Conference on land mines, which was held in Kempton Park during May 1997. The Swiss Federal Department of Foreign Affairs is currently awaiting proposals from Alkantpan to manage a second de-mining project in Mozambique. The first one to the value of R1 million has already been completed. The estimated value of the new project would be between R5-R6 million.

ii. Early warning Systems

Switzerland is concerned by the proliferation of conflicts on the continent and supports South Africa in its view that an early warning system needs to be developed to prevent conflict situations from developing. The placement of a Swiss researcher at the Institute of Strategic Studies (ISS) took place in 1999, with the specific goal to support South Africa in its endeavours to establish such a system. Switzerland also made a substantial financial contribution to the establishment of an early warning centre at the ISS.

It is of particular interest that Switzerland has informed the Department that it greatly values South Africa's leadership role and capabilities in Africa and that it would like to shape its own activities in Africa in cooperation with South Africa. Considering Switzerland's nature of involvement in Africa and it's aforementioned objectives that are very similar to those of the New Partnership for Africa's Development, Switzerland is an ideal partner from the developed world to engage in support of the African Renaissance.

As Switzerland's involvement in Africa is in many ways a reflection of the African Renaissance calabashes, its relations with Africa and opportunities for engagement are explained by the African Renaissance Country Scan.

6.3 OVERVIEW OF SWISS RELATIONS WITH THE UNITED NATIONS

Issues such as the promotion of human rights, good governance, democracy and the constitutional state, disarmament and arms control and environmental conservation enjoy high priority in Swiss foreign policy. Switzerland is also actively involved in peace initiatives and has provided humanitarian aid and financial expertise in Kosovo, the Republics of Yugoslavia, Macedonia and Bosnia-Herzegovina, as well as the Caucasus and Rwanda/Burundi. The question of human rights and the human dimension in the framework of the peace process in the Middle East is also of special importance to Switzerland. Despite the fact that many of the objectives of the UN and Swiss foreign policy are nearly identical and considering Switzerland's personnel and monetary contribution, as well as active participation in many of the UN's activities, it is an anomaly that Switzerland's traditional stance of permanent armed neutrality has, in the past, got in the way of it formally joining the UN.

Since 1981, it has been the Swiss government's stated objective to formally join the United Nations. Although a substantial number of parliamentarians and Cantons supported the proposal to join the UN, it was defeated in a referendum in 1986. An attempt by the Swiss Government to allow Swiss troops to participate in UN peacekeeping operations was rejected decisively in a referendum in June 1994. This was another blow to the Swiss Government's efforts to join international bodies and was seen as a clear indication that the majority of Swiss voters still regard neutrality as of utmost importance.

The Swiss government, however, felt that it is absurd that Swiss citizens would not wish the country to be a full member of the UN, despite their similarities in objectives, the important role played by Geneva, as well as Switzerland's already active role in the UN agencies. As a result, the government and supporters launched a new initiative in 1998 to join the United Nations.

The formal procedure to join the UN (seen also as a test case for public sentiment on EU accession) started, therefore, at the end of June 2000 which was envisaged to lead to a referendum on the matter in 2002. The Swiss government was confident that, although in 1986 some 75.4% of Swiss voters rejected UN membership in the referendum, the electorate was increasingly becoming more open to the idea of joining the world body, as it has since then approved membership of the IMF and the World Bank (55.8% in favour in 1992). The move towards membership had the support of all the major parties except the conservative Swiss Peoples Party (SPP).

In a historic referendum held on 03 March 2002, Swiss voters decided in favour of joining the United Nations. The close result was in stark contrast to the last vote on membership in 1996, when voters decisively rejected joining the UN. The yes vote meant that Switzerland became the 190th member of the UN - the last country bar the Vatican to join the world body. The final count showed that 55% of voters had cast their ballots in favour. Voter turnout was far higher than usual at 58%. Three of four political parties in government were in favour of membership, as was the business community. South Africa co-sponsored a Resolution to have Switzerland admitted to the United Nations as the 190th member. On the 10th of September 2002, Switzerland was finally admitted and became a member of the United Nations.

6.4 OVERVIEW OF SWISS RELATIONS WITH THE EUROPEAN UNION

6.4.1 Bilateral agreements between Switzerland and the EU

Since early 1999, Swiss politics was preoccupied with the debate on the bilateral accords between Switzerland and the EU. The bilateral accords are intended to serve as an instrument to regulate Switzerland's relationship with the EU in seven important areas and represent Switzerland's vested interest in realigning itself to the EU in areas in which Switzerland felt exposed by existing disparities in the regulatory environment. Whilst the Swiss government considered the negotiation of an improved regulatory environment of utmost importance, it seems even more likely that the bilateral accords will serve as a precursor towards a long term strategy to push for eventual membership of the EU, following a failed attempt in 1992.

Although there had been considerable initial opposition to the bilateral accords, the Swiss Parliament ratified the accords on 08 October 1999 with a surprisingly comfortable majority. Expected opposition from the conservative Swiss Peoples Party (SVP) never materialised, making the passage of the accords all that more surprising to outside observers, especially in the run up to the Swiss Federal Elections of 24 October 1999.

Following Parliament's ratification, a further historic referendum on 21 May 2000 saw Swiss voters break away from the traditional position of isolationism, by voting overwhelmingly in favour (67,2%) of the bilateral accords with the EU. By approving a package of treaties linking Switzerland more closely to Europe, Swiss voters have given the green light to take a major step towards closer integration with the European Union. However, although the bilateral accords integrate the Swiss economy with that of the EU, Switzerland is still some way from full membership of the EU. It should be borne in mind that although the Swiss people approved the bilateral accords by a surprisingly large two-thirds majority, two cantons, namely the Italian-speaking Ticino and Schwyz in central Switzerland, voted against the accords. Furthermore, only 48 per cent of the 4.5 million Swiss voters cast their ballots on what was widely perceived to be one of the most significant foreign and domestic policy issues in years.

Switzerland has to date engaged in two sets of bilateral negotiations with the EU known as Bilateral Accords I and II

The bilateral accords I were agreed at the political level in December at a meeting in Vienna. The seven agreements were initialled in Bern on 26 February 1999 and signed in Luxemburg on 21 June 1999. After the completion of the process of ratification the seven agreements came into force on 01 June 2002 and cover the following areas:

i. Transport

This accord will co-ordinate road and rail transport between Switzerland and the EU to ensure sustainable mobility while, at the same time, providing effective measures to protect the environment. From a Swiss point of view, this accord is part of a new comprehensive transport policy which aims at moving as many heavy goods vehicles as possible off the Swiss roads and onto rail transport through the Alps. To do this, Switzerland has committed itself to modernising its rail system, including the construction of two new tunnels through the Alps.

ii. Civil Aviation

The accord gradually puts the Swiss and the European airlines on an equal footing. It defines, on a reciprocal basis, the terms on which Swiss airlines will have access to Europe's deregulated civil aviation market. Moreover, Swiss airlines will be free to set rates and to decide on their own on the opening of new routes, as well as to choose the capacity of their aeroplanes. Finally, Swiss airlines will be able to acquire a majority shareholding in EU airlines without carriers losing their status as EU carriers.

iii. Agricultural Production

The accord does not mean complete freedom of trade for all agricultural products, as there will still be considerable protection in sensitive areas such as grains, meat, wheat and milk. The agreement leads to major reductions, or even scrapping, of customs duties by both Switzerland and the EU. In addition, trade in agricultural products will be simplified by the mutual recognition of testing in the veterinary sector and plant protection. Similarly, quality standards for fruit and vegetables will be mutually recognised by both Switzerland and the EU. Thus Swiss products can be exported to the EU without prior EU certification. The agreement also offers a better mutual protection for all labels of origin of wine and spirits.

iv. Technical Barriers to Trade

Since the accords recognise Swiss laws as equivalent to those of the EU, the need for duplicate testing will become obsolete. This means that under the bilateral accords, Switzerland and the EU agree to mutually recognise quality standard tests, certificates and authorisations for a majority of products originating from Switzerland and the EU. The list includes heavy machinery, electrical appliances, medical products, motor vehicles and radio and telecommunications equipment. However, in some cases where Swiss requirements differ from those of the EU, these will remain and will require the continuation of dual conformity tests.

v. Public Procurement

Switzerland and the EU extend the current World Trade Organisation regulations on public procurement contracts and make them compulsory for public procurement at the local authority level. The rules specify the duties for both EU and Swiss authorities when awarding contracts for goods and services, as well as construction projects. Public procurement contracts must be published in Switzerland at the national level and in the EU at the European level. The project contractor must accept the most advantageous bid, although Swiss law allows for criteria such as quality of work and environmental impact.

vi. Research

The accord allows private and public Swiss research institutions to fully participate in all science and research programmes of the EU. Switzerland will obtain unrestricted access to all the results of EU research programmes, including results of projects in which Swiss researchers have not participated. On the basis of reciprocity, EU researchers and institutions will be allowed to participate in Swiss national research projects.

vii. Free Movement of People

Switzerland agrees to abolish its quota system for foreign seasonal workers and accepts the concept of free movement of EU citizens to and within Switzerland. The opening of the labour markets of both the EU and Switzerland will be gradually phased in over a trial period of seven years, at the end of which Switzerland will be free to decide whether to continue with the free movement. Freedom of movement in Switzerland for EU citizens will be gradually phased in over 12 years. Switzerland has maintained the right to impose emergency restrictions, should there be a major migratory influx. The accord applies to workers; the self-employed as well as non-working persons who otherwise have sufficient finiancial means. The agreement also spells out that Switzerland and the EU mutually recognise academic and technical diplomas. In addition, the accord foresees a number of measures to allay Swiss fears of wage dumping that may result from the arrival of lower-paid workers on the Swiss labour market. Finally, social security systems are to be co-ordinated under the accord so that social security coverage is as complete as possible and duplication of coverage is avoided. The sector agreements will enter into force after ratification in all Member States. The agreements are linked by a so-called "guillotine clause", which means that all agreements can only come into force together and will come to an end if any one of them is terminated.

Since June 2001, negotiations on four new agreements are underway on improved co-operation against fraud, on the environment, on statistics and on a liberalisation of trade in processed agricultural products. Further negotiations in the areas of trade in services, program participation, savings, taxation and Schengen/Dublin co-operation are currently under preparation.

6.4.2 Bilateral accords II cover ten topics in total. The first seven are left overs, that is, issues which could not be dealt with in the last bilateral negotiations, but for which Switzerland and the EU agreed in the final act embodying the bilateral agreements I to open early negotiations.

i. Services

The three fundamental freedoms, freedom of movement of persons, capital and services, are closely linked in the internal market. In the framework of the bilateral negotiations, it was therefore difficult to obtain an outcome which separated these areas that are theoretically distinct in law, while liberalizing the movement of persons. The compromise arrived at stipulates that, in relation to the agreement on the free movement of persons, only crossborder services linked to persons will be liberalized for a maximum period of 90 days each year. General liberalization in the field of services on the basis of the « existing Community achievements » (acquis communautaire) will be negotiated at a later stage. This negotiation will, in particular, concern insurance companies, securities, telecommunications, transport and the professions.

As a net exporter of services, Switzerland has an interest in the liberalization of services with the EU. Easy access to the Community market would have the effect of deterring the transfer of service activities of Swiss companies - and with them employment - to the EU. This would strengthen Switzerland as an economic centre.

ii. Pensions

The issue here is the double taxation of the pensions of EC officials in Switzerland. The EU levies tax at source on pensions paid to its former civil servants. If a retired EU official is domiciled in Switzerland, the net amount of the pension paid to him by the EU is liable for Swiss income taxes. As no double taxation agreement exists between Switzerland and the EC, the pensions of retired EU officials are taxed twice. The EU wishes to close this gap.

For Switzerland, the preferable solution would be that of sharing the tax entitlement between the EU and Switzerland.

iii. Processed agricultural products

Protocol 2 to the 1972 Free Trade Agreement defines the details of the tariff treatment applied to processed agricultural products (such as chocolate, biscuits, soups, sauces, pasta, soluble coffee). However, this Protocol is no longer up do date and its application raises a number of problems.

The objective for Switzerland is to broaden and harmonize the coverage of Protocol 2 to the Free Trade Agreement by improving the frontier price compensation mechanism for the agricultural component of products with a view to enabling both parties to make the most effective possible use of the financial resources available for export refunds. A ceiling is also placed on these financial resources by the WTO. This would in fact enable the largest possible volume of basic agricultural products incorporated into processed products to benefit from export refunds. In addition, these improvements would increase the international competitiveness of the food industries of both parties

iv. Environment

European Environment Agency: The main task of the European Environment Agency (EEA) is to supply objective comparative data on the state of the environment in the European countries as a scientific basis for new regulatory provisions of the European Union. By participating in the EEA, Switzerland can contribute to the European wide definition of measures in favour of the environment. Having regard to the international nature of the problem of the environment, the EEA has become an indispensable instrument for cooperation between the European States.

So far, Switzerland has only participated on an informal basis in the work of the EEA and was therefore disadvantaged in the field of the exchange of information. Switzerland's membership of the EEA would not only remedy this drawback, but also enable it to take part in the other fields of activity of the EEA.

v. Statistics

Statistics are an essential instrument for the management of a modern State, in particular from the angle of observation and management of its relations with other States. The work of Eurostat enables dependable and comparable statistics to be compiled on the basis of uniform definitions for all the EU countries. A bilateral agreement on statistics would permit the forwarding, comparison and publication of information between partners.

Harmonization of statistics between Switzerland and the EU would improve the comparability of data in such crucial fields as commercial relations, the labour market, social security, transport, regional and environmental development
vi, Education, occupational training, youth

The EU promotes mobility for students, persons undergoing training and young people in general in the framework of Community programmes known as SOCRATES (general education), LEONARDO DA VINCI (occupational training) and YOUTH (extracurricular activities). Over thirty countries are participating. A new bilateral agreement would enable young Swiss people to play a full part in these Community programmes.

At present, Switzerland takes part in these programmes under a "silent partnership" which the EU could terminate at any time. Switzerland wishes to replace this special status by participation in these three programmes established on a legal - and therefore more certain - basis. That would enable Swiss participants in these programmes to benefit from the same rights as the other countries in respect of initiatives, launch and conduct of projects. As far as the EU is concerned, Swiss participation in the current programmes (2000-2006) is impossible for legal reasons. The Council of Ministers and Commission therefore gave Switzerland an assurance of participation in the future generation of programmes (beginning in 2007). In the meantime, the existing "sleeping partnership" is to be extended and deepened.

vii. Media

Promotion of the production and distribution of European films and programmes is one of the priorities of the EU's audiovisual policy. The EU has created the MEDIA programme, which is designed to help European productions to overcome structural difficulties in relation to the non-European competition. This programme is open to the EU Member States, the EFTA countries which belong to the EEA and the applicant countries. Switzerland has been excluded since its rejection of the EEA. By making a financial contribution to the MEDIA programme, Switzerland would signify its interest in taking part in the promotion of European audiovisual productions and would enable Swiss cinematographic and television creation to benefit from the forms of support offered by MEDIA.

That is why Switzerland aspires to full participation in the Community MEDIA Plus (promotion, development and distribution of Community audiovisual works) and MEDIA Training (training programme for professionals in the audiovisual programme industry of the EU) programmes. Swiss audiovisual legislation is already largely compatible with EU provisions; one important condition for participation in the MEDIA programmes is therefore satisfied.

viii. Taxation of savings

The Federal Council has repeatedly made clear the fact that Switzerland has no interest in attracting transactions whose sole purpose might be to evade possible new Community regulations. Within the framework of its own legal order, Switzerland is willing to make its financial centre unattractive to this type of transaction provided, however, that the EU introduces an effective system for the taxation of all interest payments and that this system is applicable not only to its Member States and their dependent or associated territories but also to the main financial centres outside the EU. Switzerland is ready to negotiate the introduction of «equivalent» measures; however, the introduction of a system for the automatic exchange of information between tax authorities cannot be envisaged. Banking secrecy is not negotiable.

A feasibility study performed for the Federal Finance Department has clarified the possibilities open to Switzerland to satisfy the EU demand for the taxation of savings. One possibility might be the imposition of a withholding tax on interest payments to natural persons who are resident in the EU. However, the Federal Council has therefore made it known that it would expect, in exchange, outstanding matters relating to taxation and financial services to be solved.

ix. Fight against fraud

Smuggling of cigarettes and other offences (such as tax fraud as defined in Swiss law, organized smuggling and possibly other unlawful forms of behaviour) connected with the international traffic of goods are problems, which concern the whole of Europe. Switzerland has no interest in the use of its territory for the organization of such activities. That is why it is willing to seek solutions with the EU and its Member states with a view to strengthening measures to combat fraud.

Switzerland is proposing that more effective action should be taken to control such offences against indirect taxation legislation in the EU and Switzerland by strengthening mutual judicial and administrative assistance procedures. In this context, constraining measures might be taken by way of mutual administrative assistance (e.g. searches, confiscation, investigations) even if the incriminated goods have had no contact with Swiss territory. However, one condition for the grant of mutual assistance would be that elements of the unlawful act must have taken place on the territory of the contracting party from which mutual assistance is requested. In such cases the lifting of banking secrecy, which does not protect criminal activities in Switzerland, would be possible. Switzerland is also willing to discuss ways of expediting mutual judicial assistance procedures, the presence of foreign civil servants during investigating procedures, the obligation of persons who are the subject of investigation to cooperate the extradition of perpetrators. Direct taxation is excluded from the negotiations.

x. Police, justice, asylum and migration (Schengen-Dublin)

The growth in organized crime and tourism with criminal purposes and the professionalization of unlawful activities by increasingly well-organized and unscrupulous delinquents is creating an imperative need for closer international cooperation. The same provision applies to the fight against clandestine immigration. In all these areas, the EU is Switzerland's most important partner. Cooperation between the Swiss security services and those of the EU would make a major contribution to the security of both parties.

Switzerland is at present largely excluded from the instruments developed by the EU (Schengen Agreement, Dublin Convention on the country of first asylum); this greatly weakens its position. Since the Schengen information system in particular was a growing source of problems for Switzerland, Switzerland decided , by public vote, to join Schengen. The Schengen visa system will kick in 2008 in Switzerland. Existing bilateral agreements on policing with our neighbouring countries and the envisaged cooperation with EUROPOL can only partially remedy these problems.

Switzerland aspires therefore to a closer cooperation in judicial and policing matters with the EU. This would be based on acceptance of the existing Schengen provisions, including participation in the Dublin Convention on the country of first asylum and would also imply new rules for the control of persons at the national border.

7. Relations with South Africa

7.1 Political relations

Present day relations with South Africa can be qualified as extremely good and very cordial. In recent years many bilateral contacts have taken place at the highest level, providing excellent opportunities to discuss relations between the two countries.

The high level working visit was by President Mbeki on 10 June 2003 accompanied by then Minister of Trade and Industry, Alec Erwin and Deputy Minister of Foreign Aaffairs, Aziz Pahad. The recent high level official visit to South Africa was by the Swiss Foreign Minister, Michelin Calmy-Rey, in March 2004.

Swiss relations before 1994 remain, however, a sensitive matter for the Swiss government, especially following growing NGO pressure on the Swiss government to examine the extent of cooperation between Switzerland and Apartheid South Africa. In May 2000, the Swiss government decided to commission an in-depth research on the subject of the relations between Switzerland and South Africa following 1945, and this task was entrusted to the Swiss Scientific Foundation which set up the national research programme NFP 42+ "Relations Switzerland - South Africa". The approved research budget totalled 2 million Swiss francs, and NPF 42+ went on to adopt 10 projects aimed at preparing a scientifically based profile analysis. This was the first time that a specific research project had been devoted to the bilateral relations between Switzerland and another country.

As from summer 2002, efforts were made to shed light on the relations between Swiss and South African military intelligence services. In addition to an investigation by the Parliamentary auditing delegation, the Federal Department of Defence, Civil Protection and Sports (DDPS) also called for an administrative inquiry. Furthermore, the Office of the Federal Prosecutor started with proceedings to investigate if there may have been infringements of the penal code. The results were published in October 2005 and remain a sensitive issue for the Swiss.

Whilst Switzerland never imposed sanctions against South Africa (other than adhering to UN arms and oil embargoes), the Swiss government claims to have demonstrated solidarity with international efforts to end Apartheid by limiting capital investments and enforcing punitive debt repayment schedules.

The Swiss government's response to the report has been muted and it is likely that the Swiss government will continue to emphasise the positive aspects of relations that have evolved since 1994 such as:

- very good bilateral relations;
- the renewal in 1999 of Switzerland's sizeable five year development aid plan
- Development Cooperation Agreement for a further five years until the end of 2004;
- the stationing of a Science and Technology Counsellor at the Swiss Embassy to facilitate S&T exchanges;
- the continuation of cultural relations through the Cape Town office of Pro Helvetia (the Swiss National Foundation for Arts and Culture) and;
- the signing of the Declaration of Intent on Joint Activities in Africa.

Post 1994 bilateral relations between South Africa and Switzerland received a significant boost in August 1998 with the State Visit to South Africa by former President Cotti and the subsequent establishment of the SA/Swiss Working Group. The Working Group has, due to its flexibility, wide-ranging nature and regularity of meetings, proven extremely successful in enhancing the quality and content of South Africa and Switzerland's bilateral relations.

The Working Group's establishment came about during the State Visit of President Cotti to South Africa in August 1998. During a meeting on 03 August 1998 between the then President Cotti and the then Deputy President Mbeki, it was decided that a Working Group should be established in order to give practical effect to issues of interest to both countries.

The Working Group was established through an exchange of Notes Verbales on 29 October 1998. Under the chairpersonship of the Chief-Director: Europe, it meets on a regular basis and consists of officials from the two respective Ministries / Departments of Foreign Affairs. It also allows for participation of members of other Government Departments or political office bearers in both countries. All meetings are based on mutually agreed upon agendas and are also minuted. The Working Group furthermore allows for different levels of participation when the need arises and was, therefore, co-chaired by the respective foreign ministers on 11 October 1999 during the successful official visit to South Africa by the then foreign minister Joseph Deiss.

As a structured forum for discussion, it has allowed for exchanges of views on sensitive issues, as for example Apartheid-era Debt, which is a highly controversial issue for Switzerland. The Working Group has clearly placed SA/Swiss relations on a higher level, inasmuch as many issues are dealt with on a programmatic basis with clear demarcations of responsibility and time frames for action. The meetings have been very useful in strengthening cooperation in technical areas such as demining, the proliferation of small arms, conflict management in Africa, Human Security and Development Cooperation. The latest Working Group meeting took place in Berne on 18 and 19 October 2005.

7.2 Economic relations

South Africa is the most important partner for Switzerland in trade, investment and economic co-operation on the African continent.
Switzerland, in return, is one of South Africa's main trading partners.
Since 2001, Switzerland faces a deficit in its trade balance with South Africa. This fact is mainly due to a 50% increase of South African exports to Switzerland since 1999. In fact, since 1994 South African exports to Switzerland have tripled.

The top products exported from South Africa (2004 are:

Precious / semi-precious metals, stones, jewellery etc. 84.6% of total
Agricultural products 10.0%
Metals and metal products 2.0%

The top products imported from Switzerland are:

Machinery 28.9%
Chemical products 22.1%
Pharmaceutical products 20.6%
Instruments 8.7%

In terms of total investment, Switzerland ranked sixth largest foreign direct investor in South Africa in 2004 South Africa ranked as twelfth largest foreign investor in Switzerland in 1999, the 3rd largest after Japan outside the EU and USA. Considerable number of Swiss companies have operations in South Africa, with many also utilizing South Africa as their base for doing business with the rest of Africa, and especially Southern Africa. South African subsidiaries and branches of Swiss companies employ around 22 000 people throughout the country and represent well-known concerns such as Nestle, Novartis, Sulzer, Hoffmann La Roche, UBS, Credit Suisse, Winterthur International and Schindler. In total, between 300 and 450 Swiss companies are represented in South Africa.

On 1 March 1997, South Africa was added to the Swiss General System of Preferences (GSP).

On 19 May 2003, negotiations were launched between South Africa ( SACU) and the EFTA States (Switzerland, Norway, Iceland and Liechtenstein) on a Free Trade Agreement. The agreement aims at promoting trade in the fields of goods, services, investment, government procurement etc. Other negotiation topics will include intellectual property, competition or market access for agricultural goods.

Parties concluded a FTA in September 2005.

7.3 Swiss Development Assistance

Before 1994, the Swiss Development Cooperation (SDC) supported non-governmental organizations in South Africa committed to fostering a democratic society based on equality. To express its support for the crucial transition process under way in South Africa, the Swiss Government decided in 1994 to substantially increase its development cooperation assistance with a "Special Program South Africa" which was scheduled to run from 1994 to 1999.

The special program focused on land reform, education and democracy/human rights. In the area of land reform, support was given to those NGO's which worked with victims of Apartheid. Between 1994 and 1999, a total of Sfr80 million was put into the special program (approximately Sfr60 million from the SDC and Sfr20 million from the Swiss Department of Foreign Affairs' Political Department III/Peace Promotion. The State Secretariat for Economic Affairs (Seco) contributed an additional Sfr10 million to promote the black private sector through partners such as Msele Nedventures, Horizon Equity for the training of black professionals, and Lugisa for technical assistance.

In August 1998, Switzerland decided to extend the Special Programme for South Africa until 2004. The main purpose of the second phase of the programme was to accelerate development by promoting social justice, reducing inequality, diminishing internal conflicts and strengthening democracy. Another objective was to promote interaction among SADC countries by fostering regional projects. The SDC budgeted about Sfr35 million for the Special Programme 2000-2004.

The program will continue until the end of 2004, after which it will become a southern African regional program.

Further to the above program, the Swiss State Secretariat for Economic Affairs is encouraging the development of small- and medium-size enterprises and has since November 2002 also engaged in the creation and funding of a Trade Law Centre for Southern Africa set up in the Faculties of Law at the Universities of Stellenbosch and Namibia, respectively. A total amount of Sfr10 million has been set aside for the next three years for this purpose.

In May 2003, the Swiss SDC indicated their commitment to finance projects under the Mutual Learning Agreement between the cities of Tshwane and Basel. These projects are mainly concerned with the development of community centers in historically disadvantaged communities and takes place against the background of Local Agenda 21. The Executive Mayor of Tshwane, Father Smangaliso Mkhatshwa is expected to visit Basel in September 2004 to sign a Memorundum of Understanding with the Chancellor of the City of Basel cementing the the already existing relationship between their respective communities.

In 2000, the Swiss Federal Department of Foreign Affairs (EDA) and the African Centre for the Constructive Resolution of Disputes (ACCORD) signed a Trust Fund Agreement on "Towards an African Renaissance: Constitutionalism in Africa - the establishment of an Expert Advisory Steering Committee on Constitutional challenges and conflict resolution in Africa". The project ran from 2000 until 2002 and received EDA financial support for the execution of the project to the tune of US$ 815,762.

Annex B: Bilateral Agreements

The following bilateral agreements are currently in place:

Agreement relating to Air Services (19/10/1959)

Convention for the Avoidance of Double Taxation with respect to taxes on income (03/07/1967)
Modification of Annex to Air Agreement of 19.10.1959 signed in 30.01.1968

Agreement concerning support to the Reconstruction and Development Programme (RDP) signed 22.11.1994.

Agreement on the Promotion and Reciprocal; Protection of Investments (26/06/1995). The Agreement entered into force on 29 November 1997.

Grant Agreement on the President's Fund of the Truth and Reconciliation Commission signed 25.02.1997.

Agreement concerning support to the Bloemendal Block 23 South Project in Port Elizabeth signed 25.06.1997.

Agreement on the Exchange of Trainees (15/06/1998)

Financial cooperation agreement on the National Student Financial Aid Scheme
(03 August 1998)

Declaration of Intent on Joint Activities (03 August 1998)

Memorundum of Understanding on Development Cooperation for the period 1 January 2000 to 31 December 2002 signed 12.10.1999.

Agreement concerning the National Student Financial Aid Scheme for the period 01.101999 to 31.03.2002 signed 23.05.2000

Agreement concerning Support to the Project Greater Tjoksville upgrading in Port Elizabeth signed 18.07.2000.

Updated: November 2005