<h3>A. Background</h3>
<p>The 1970 UNESCO Convention<a href="#_ftn1" name="_ftnref1">[1]</a> aims to protect cultural heritage and establishes measures to prohibit and prevent the illicit import, export and transfer of cultural property. Switzerland ratified the 1970 UNESCO Convention in 2003 and transposed it into national law with the introduction of the Cultural Property Transfer Act (<strong>CPTA</strong>)<a href="#_ftn2" name="_ftnref2">[2]</a> on June 1, 2005. The CPTA and the implementing provisions in the Cultural Property Transfer Ordinance (<strong>CPTO</strong>)<a href="#_ftn3" name="_ftnref3">[3]</a> contain a wide range of measures to preserve the cultural heritage of humanity and combat the illegal import and export, theft and looting of cultural property.<a href="#_ftn4" name="_ftnref4">[4]</a> These include the obligation to declare cultural property upon import, transit, or export, duties of diligence for persons engaged in the art trade and auction business, guarantees of return to foreign lenders of cultural property, repatriation actions for foreign states and financial assistance and intergovernmental cooperation.</p>
<p>On January 1, 2026, the partially revised CPTO (<strong>revCPTO</strong>) came into force, introducing a number of important changes for the art trade, auction houses, transporters and freight forwarders of art and cultural property, as well as for public and private museums and collections.</p>
<h3>B. Stricter Duties of Diligence for the Art Trade and Auction Houses</h3>
<p>Special duties of diligence apply to persons engaged in the art trade and auction business who trade in cultural property on a commercial basis in Switzerland (Article 16 CPTA). These may be natural persons or legal entities based in Switzerland or abroad.</p>
<p>These duties of diligence apply regardless of value to cultural property from archaeological or paleontological excavations or discoveries, to fragments of historical monuments and finds from excavation sites and to ethnological cultural property. For all other cultural property, the due diligence obligations apply from an estimated value of CHF 5,000.</p>
<h4>1. Determination of Identity and Right of Disposal</h4>
<p>Persons engaged in the art trade and auction business are required to keep records of their acquisition of cultural property. The origin of the cultural property (if known), its description, the purchase price and the name and address of the seller or consignor must be documented. The identity of the seller or consignor must now be verified in all cases with a probative document (Article 17(2) revCPTO). Previously, this obligation only applied if there were doubts about the accuracy of the information provided.</p>
<p>The seller or consignor must sign a declaration confirming its right to dispose of the cultural property. This obligation was tightened as of January 1, 2026, so that the declaration must now expressly state who the owner of the cultural property is (Article 18 revCPTO).</p>
<h4>2. Informing Customers About Existing Import and Export Regulations and Retaining the Relevant Evidence</h4>
<p>Another element of due diligence is informing customers about existing import and export regulations of signatory states to the 1970 UNESCO Convention (Article 16(2)(b) CPTO). This also includes bilateral cultural property agreements between Switzerland and third countries. If, for example, a sale with subsequent export to the EU is planned, customers must also be informed about the EU Import Regulation 2019/880 with its complex import regime.</p>


<p>Neither the CPTA nor the revised CPTO specify which import and export rules must be explained in each individual case and in what level of detail. Written information on all import and export rules of the 149 signatory states (as of February 2026) to the 1970 UNESCO Convention is not feasible due to the scope of these regulations. A proportionate implementation of this stricter duty of care could, for example, be written information based on risk-based principles (tailored to the customer) with references to the relevant regulations and materials.</p>
<h4>3. Extended Documentation and Retention Requirements</h4>
<p>As of January 1, 2026, two new obligations have been added to the documentation and storage requirements (Article 19(1) revCPTO): First, meaningful photographs of the cultural property must be taken. This brings the regulations into line with EU Regulation 2019/880 on the movement and import of (non-EU) cultural goods into the EU customs territory, which requires color photographs of the cultural goods for applications for an import license or an import declaration.<a href="#_ftn5" name="_ftnref5">[5]</a> Secondly, these photographs and the customer&#8217;s written confirmation that they have been informed must be kept for 30 years. The Specialised Body for the International Transfer of Cultural Property (the <strong>Specialised Body</strong>) as the administrative body to implement the CPTA (part of the Federal Office of Culture, <strong>FOC</strong>) may inspect these documents during on-site checks at art dealers or auction houses (Article 20 CPTO).</p>
<h4>4. Customs Declaration</h4>
<p>Cultural property must be declared as such at customs upon import into Switzerland, transit and export, with detailed information provided. The storage of cultural property in an open customs warehouse or a freeport is also considered import and is subject to declaration.</p>
<p>The date and dimensions of the cultural property must now be specified in the customs declaration (Article 25(1)(c-d) revCPTO). Determining the age of cultural property is difficult in practice and can often only be estimated. It can be assumed that the new requirement to state the date was introduced in line with EU Import Regulation 2019/880, which applies thresholds of 250 years for archaeological cultural property and 200 years for categories of cultural property classified as less endangered.</p>
<p>The extended declaration requirements now stipulate that it must be stated whether the cultural property is subject to an export license from Switzerland, which is only required for Swiss cultural property that is listed in the federal or cantonal register. In addition, it must be stated whether the cultural property is subject to a bilateral agreement and whether it is subject to an export license requirement under the law of the foreign contracting state (Article 25(2) revCPTO). The CPTA and the CPTO do not provide for an export license requirement for the export of non-Swiss cultural property. In the case of collective shipments of cultural property, it is now stipulated that the type of object, details of the place of manufacture or excavation, the date and the dimensions must be specified for each individual object (Article 25(3) revCPTO).</p>
<h3>C. Changes for Collections, Museums and Research Institutions</h3>
<h4>1. Return Guarantees</h4>
<p>If a museum or other cultural institution in Switzerland wishes to temporarily borrow cultural property from a lender in another UNESCO member state, the borrowing institution in Switzerland can apply to the Specialised Body to issue a return guarantee to the (foreign) lending institution for the duration of the exhibition in Switzerland (Article 10 CPTA). Such a guarantee protects the loans from legal claims by third parties and thus grants state «immunity» for the duration of the loan.</p>
<p>As before, the application for a return guarantee must be submitted at least three months before the intended import of the cultural property into Switzerland. A loan agreement signed by all parties must now be enclosed with the application (Article 7(4) revCPTO). Previously, an extract from the loan agreement was sufficient. If a return guarantee has already been issued, it is now possible to extend it by a maximum of four months in the event of an uninterrupted extension of the exhibition (Article 7(6) revCPTO).</p>
<h4>2. Financial Assistance</h4>
<p>The CPTA provides for the granting of financial assistance to private and public-law organizations. This assistance may be granted for the purpose of temporarily storing cultural property endangered abroad due to extraordinary events in museums or similar institutions in Switzerland. It may also be granted for projects aimed at preserving the cultural heritage of other signatory states to the 1970 UNESCO Convention and, in exceptional cases, to facilitate restitution.</p>
<p>A new provision gives priority to applications that correspond to the current threat to the cultural property in question (Article 15 revCPTO). Applications for the current year must be submitted to the Specialised Body by May 31.</p>
<h4>3. Use for Research Purposes Instead of Restitution to the Country of Origin</h4>
<p>Law enforcement authorities may order the seizure of cultural property. Cultural property confiscated in criminal proceedings becomes the property of the federal government, which then restitutes it to its country of origin. The new Article 27a CPTO gives the Specialised Body more leeway in cases where confiscated cultural property cannot be restituted to the country of origin because it does not want the object to be returned or because it cannot be attributed to a specific country of origin. In such cases, the Specialised Body may transfer confiscated cultural property to suitable institutions for research or educational purposes or destroy it in a controlled manner if this is justified due to its minor significance or advanced state of decay.</p>
<h3>D. Practical Significance and Outlook</h3>
<p>The partial revision of the CPTO clarifies and tightens the regime for the cross-border or domestic transfer of cultural property that has been in place since 2005, without changing its basic structure. The focus is on duties of diligence for dealers and auction houses, which entail additional obligations regarding information, clarification, documentation and storage. For persons involved in the art trade and auction business, this means that they must rethink existing processes, from consignment to export and critically review their contracts to ensure compliance with the revised CPTO. The aim of informing customers of existing import and export regulations and obtaining their written confirmation is to increase transparency and awareness of the existing import and export rules. It seems that the Swiss legislator no longer considers a clause in the general terms and conditions, the auction terms, or a verbal notice to be sufficient to fulfill the duty of information. Therefore, it is crucial to review and, if necessary, revise the information sheets, forms and clauses.</p>
<p>In customs matters, the requirements for the declaration of cultural property are being expanded. In addition to the existing declaration requirements of, <em>inter alia,</em> the type of object and its origin, the date and dimensions must now be declared. Cultural property must be explicitly declared as such and in the case of collective shipments, the information must now be provided for each individual object. This increases the transparency of cross-border transfers but in practice leads to a noticeable increase in workload for art dealers, auction houses, transporters and ultimately also operators of freeports.</p>
<p>Overall, the revision of the CPTO aims to improve traceability and documentation and further aligns the Swiss cultural property regulation with European standards. Against the backdrop of efforts to combat illegal trade, these changes, which facilitate the tracking of cultural property by customs and law enforcement authorities, are understandable.</p>
<p>For dealers, collectors and museums, it will ultimately be crucial that the new requirements are implemented in a risk-based and proportionate manner so that they are perceived as practical instruments for clean trade and lending of cultural property and not as a predominantly bureaucratic burden.</p>
<h6><a href="#_ftnref1" name="_ftn1">[1]</a> Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property of November 14, 1970 (SR 0.444.1).<br />
<a href="#_ftnref2" name="_ftn2">[2]</a> Federal Act on the International Transfer of Cultural Property (Cultural Property Transfer Act, CPTA) of June 20, 2003 (SR 444.1).<br />
<a href="#_ftnref3" name="_ftn3">[3]</a> Ordinance on the International Transfer of Cultural Property (Cultural Property Transfer Ordinance, CPTO) of April 13, 2005 (SR 444.11).<br />
<a href="#_ftnref4" name="_ftn4">[4]</a> The Federal Council has enacted special measures for the protection of cultural property from conflict regions in the ordinances on Iraq, Syria and Ukraine.<br />
<a href="#_ftnref5" name="_ftn5">[5]</a> Article 8(1)(c) and Article 12(2)of EU Implementing Regulation 2021/1079 of June 24, 2021.</h6>


Bulletin_KGTV_Preview_1000x1000_002

Stricter Rules for Trading Cultural Property

<h3>Competition agreements, abuse of market power, merger control, and more: what is changing and what is staying the same.</h3>
<p>The partial revision of the Cartel Act (<strong>CartA</strong>) secured parliamentary approval on December 4, 2025. After several rounds of debate and proposed amendments in both chambers, the final points of discussion have been resolved. Until recently, the question remained open as to whether quantitative circumstances should also be taken into account alongside qualitative circumstances in order to determine whether a competition agreement is subject to sanctions.</p>
<p>The partial revision brings Swiss antitrust law into line with international standards, increases the efficiency of competition supervision, and provides companies with greater legal certainty. The introduction of the<em> Significant Impediment to Effective </em>Competition (<strong>SIEC</strong>) test aligns Swiss merger control with European merger control. In addition, civil antitrust law is strengthened and the procedural rights of companies and consumers are expanded.</p>
<p>The Cartel Act has been the basis for ensuring effective competition in Switzerland since 1995. After attempts to reform the Act failed in 2012, the Federal Council started afresh in November 2021, publishing a <a href="https://www.homburger.ch/en/insights/partial-revision-of-the-cartel-act-swiss-federal-council-publishes-preliminary-draft/">preliminary draft</a> and opening a public consultation process. The <a href="https://www.homburger.ch/en/insights/partial-revision-of-the-cartel-act-swiss-federal-council-presents-draft-law">dispatch</a> was adopted by the Swiss Federal Council in May 2023 and introduced into Parliament. The dispatch was <a href="https://www.homburger.ch/en/insights/cartel-act-revision-national-council-sets-the-course/">debated</a> at length in the National Council and the Council of States in June 2024. Due to various deviations and new proposals, the differences were resolved in the fall and winter sessions of 2025.</p>
<p>The partial revision will commence in 2027 at the earliest.</p>
<h3>1. Effects-based Assessment Under Articles 5 and 7</h3>
<p>One of the most contentious questions of Swiss competition law reform has finally been decided. Agreements containing hardcore restrictions of competition and potentially abusive conduct will now always undergo an effects-based assessment. In each case, the qualitative and quantitative aspects of the agreement must be considered.</p>
<h4>1.1 Assessment of Potentially Anticompetitive Agreements</h4>
<p>Not only the nature, but also the effect of a restriction on competition will be decisive in every assessment under the amended Art 5(1<sup>bis</sup>) of the CartA. The Cartel Act currently distinguishes between two types of competition agreements:</p>
<ul>
<li>In the case of agreements with hardcore restrictions, the law presumes the elimination of effective competition (Article 5(3) and (4) CartA). These include price-fixing, quantity-restricting, and geographic market-allocating agreements between competitors, as well as agreements between companies at different levels of the supply chain that impose minimum or fixed prices or provide for an absolute territorial protection. If a company fails to refute this legal presumption <em>and</em> justify the agreement on grounds of economic efficiency, it faces a sanction of up to 10% of its annual turnover (Article 49a(1) CartA).</li>
<li>All other competition agreements must be examined to determine whether they significantly restrict effective competition. The assessment of whether the restriction is «significant» requires a consideration of the kind of restriction and its effect on competition. These agreements are not directly subject to sanctions but may be prohibited in the future. If a company violates this prohibition, it faces a sanction (Article 49a(1) CartA).</li>
</ul>
<p>The partial revision increases the requirements for establishing a hardcore anticompetitive agreement. In future, an agreement will only be deemed «hardcore» if it is capable of impairing effective competition in the specific case. Qualitative criteria alone, such as empirical studies on the effect of comparable agreements, will be insufficient. The quantitative effects of the agreements must be examined. This could include having regard to a company&#8217;s market share and market position, as well as existing barriers to entry to a market.</p>
<p>This legislative adjustment towards an <em>effects-based approach </em>is a direct response to the Federal Supreme Court ruling in the <em>Gaba</em> case (BGE 143 II 297). In 2016, the Federal Supreme Court ruled that certain agreements listed in Article 5(3) and (4) CartA, by their very nature, significantly restricted competition. It was no longer necessary to prove their economic harmfulness on a case-by-case basis using quantitative criteria. The impetus for the change came from a motion by former Council of States member Olivier Français, which was included in the partial revision.</p>
<p>This reform aligns Swiss law with recent developments in the EU: the European Court of Justice (<strong>ECJ</strong>) also requires an assessment of the legal and economic context in the case of so-called targeted competition agreements (ECJ of June 29, 2023, Case C-211/22 P – <em>Super Bock Bebidas</em>, previously ECJ, Case C-307/18 of January 30, 2020 <em>– Generics (UK))</em>.</p>
<h4>1.2 Assessment of Potentially Abusive Conduct</h4>
<p>Market dominance is not per se prohibited under Swiss competition law, but the abuse of a dominant market position can be sanctioned (Articles 7 and 49a(1) CartA). In order to determine whether a dominant position has been abused, the Competition Commission (<strong>COMCO) </strong>must, pursuant to Article 7(3) of the revised Cartel Act, also examine qualitative elements and quantitative effects.</p>
<p>This reform was also made against a background of evolving Supreme Court jurisprudence. In January 2025, the Federal Supreme Court held that abuse of a dominant market position only exists if, in individual cases, conduct is «effectively potentially capable» of impairing effective competition (FSC 2C_244/2022 of January 23, 2025 – <em>Vifor/HCI </em>Solutions). Three years earlier, the Federal Supreme Court had stated that an abstract threat to competition could be sufficient to assume abuse of a dominant market position (FSC 2C_596/2019 of November 2, 2019 – <em>SIX/DCC)</em>. The legislative clarification that the abusiveness of conduct must be assessed on a case-by-case basis and on the basis of quantitative and qualitative factors therefore reflects these developments.</p>
<h3>2. Change regarding agreements on gross prices on the supply side</h3>
<p>Article 5 of the CartA will be amended so that only agreements on minimum or fixed prices and maximum prices on the demand side fall under the presumption in Article 5(3) of the CartA. An indirect supply-side price agreement, for example via gross price lists, will therefore no longer be considered a agreement with hardcore restrictions, but will be subject to a case-by-case assessment under Article 5(1) CartA.</p>
<h3>3. Modernization of Merger Control</h3>
<p>Certain planned concentrations must be approved by COMCO before they can be implemented. A notification requirement applies if the companies involved have a worldwide turnover of CHF 2 billion or a total turnover of at least CHF 500 million in Switzerland and (in both cases) at least two of the companies involved have a turnover of at least CHF 100 million each in Switzerland (Article 9(1) CartA). A notification obligation also exists if a company involved in the merger has been found (by a final decision in proceedings under the Cartel Act) to have a dominant position in a specific market in Switzerland and the merger affects that market or a market upstream or downstream of it or a neighboring market (Article 9(4) CartA).</p>
<p>The core element of the reform to the Cartel Act concerning merger control is the introduction of a new substantive assessment standard: mergers will now be assessed on the basis of the SIEC test. In addition, certain transactions that are subject to international notification requirements will in future be subject to simplified Swiss merger control notification procedures.</p>
<h4>3.1 SIEC Test Instead of Qualified Market Dominance Test</h4>
<p>When reviewing a notifiable concentration, the Competition Commission currently applies the qualified market dominance test (<em>dominance plus</em>). COMCO may prohibit a merger or authorize it subject to conditions or obligations if the merger creates or strengthens a dominant market position that could eliminate effective competition (Article 10(2) CartA).</p>
<p>The introduction of the SIEC test will enable COMCO to intervene if a merger</p>
<ul>
<li>significantly impedes effective competition; and</li>
<li>does not result in any verifiable efficiency gains for consumers that are justified by the notifying companies and that offset these disadvantages (Article 10(2) revised CartA).</li>
</ul>
<p>The switch from the qualified market dominance test to the SIEC test brings the substantive assessment in Swiss merger control in line with the international standard.</p>
<p>Unlike the qualified market dominance test, the SIEC test allows for intervention in cases of unilateral, or «non-coordinated», effects below the threshold for single market dominance. This makes it easier to target certain mergers that significantly impede competition, such as those leading to non-collusive oligopolies, either by prohibiting them or approving them subject to conditions and obligations. It is no longer necessary to establish that such mergers lead to the creation or strengthening of a dominant market position.</p>
<p>In addition to lowering the threshold for COMCO intervention in notifiable concentrations, the SIEC test also allows for a better assessment of efficiency gains resulting from these concentrations. These efficiency gains (e.g., synergies) must be objective and verifiable. According to the dispatch, this wording emphasizes the increased obligation of companies to cooperate and substantiate these gains (dispatch of May 24, 2023, p. 38).</p>
<h4>3.2 Simplified Notification for International Mergers</h4>
<p>For international mergers that are also assessed by the European Commission, the revised Cartel Act will waive the notification requirement if all the affected markets are defined geographically in such a way that they cover Switzerland and at least the European Economic Area (EEA) (Article 9(1<sup>bis</sup>) revised CartA).</p>
<p>This change is logical and reflects the fact that the same substantive assessment (the SIEC test) will now be applied by both the EU and Swiss competition authorities. Therefore, no differences in the outcome of that assessment would be expected. However, the significance of this change should not be overestimated. Even today, merger notifications in Switzerland in such cases are regularly based on the notification submitted to the EU Commission. As defining the geographic scope of affected markets can be uncertain, many concentrations will still have to be notified to the Competition Commission in case of doubt. The dispatch expressly states that it is the responsibility of the companies concerned to check the conditions for a waiver of notification and that, in the event of an erroneous waiver of notification, this must be reported «without delay» (dispatch of May 24, 2023, p. 34 f.).</p>
<h3>4. Strengthening Private Enforcement</h3>
<p>Companies and natural persons who have suffered damage due to unlawful competition agreements will be able to bring civil law claims. The partial revision extends this right to end customers, including consumers and public authorities.</p>
<p>According to Article 12 of the revised CartA, anyone whose economic interests have been threatened or harmed by an unlawful restriction of competition may claim for damages or the surrender of profits. The revised Cartel Act therefore closes a liability gap: Previously, a company that unlawfully hindered competition could, under certain circumstances, defend itself against damages claims brought by other companies by arguing that they had not suffered any loss because they were able to pass on any additional price paid as a result of the infringement downstream to the end customers (known as <em>the passing on defense)</em>. These end customers were unable to bring claims for damages due to a lack of standing.</p>
<p>The limitation period for damages claims will be suspended from the opening of the investigation by COMCO until its final decision on liability (Article 12(1) revised CartA). In addition, the power of civil courts to rule that an anticompetitive agreement is void has been clarified, further facilitating the enforcement of civil claims (Article 13 revised CartA).</p>
<h3>5. Amendments to Administrative Procedural Law</h3>
<p>The partial revision also makes certain changes to administrative procedure. In particular, deadlines (Article 44a revised CartA) and compensation for parties in antitrust proceedings (Article 53b revised CartA) are introduced. In addition, the law now expressly enshrines the so-called «Principle of Investigation» (Article 39a revised CartA).</p>
<p>The notification procedure under Article 49a(4) of the revised CartA will also be amended. As part of this procedure, companies can notify COMCO in advance of planned conduct that could be classified as an unlawful restriction of competition. Currently, any sanctions for the notified conduct are waived where COMCO does not initiate a preliminary investigation (Article 26 CartA) against the company within five months. Under the partial revision, this period will be reduced to two months and COMCO will be required to initiate a formal investigation (Article 27 CartA) during this period to retain its power to sanction the conduct. Failure to do so will eliminate any risk of sanctions associated with the proposed conduct.</p>
<h3>6. Key Implications for Businesses</h3>
<p>For companies, the key implications of the reform are as follows.</p>
<p>The revised Cartel Act requires an effects-based analysis of potential restrictions on competition. This will make it more difficult for COMCO to prove an unlawful agreement or abuse of a dominant market, while also giving companies more scope for meaningful cooperation.</p>
<p>The lower thresholds for intervention in merger control may lead to more in-depth investigations (Phase II). At the same time, the SIEC test will make it easier to assess the efficiency gains associated with a merger.</p>
<p>Certain hurdles to bringing civil antitrust claims have been lowered, including through the extension of standing to consumers. This may lead to an increase in the number of damage claims brought against companies in Switzerland in relation to alleged violations of the Cartel Act.</p>


Homburger Bulletin

Parliament Passes <br>Revision to <br>Swiss Cartel Act 

<h3>A. Background</h3>
<p>On December 19, 2025, the Swiss Parliament adopted the Swiss Investment Screening Act. By limiting its scope to takeovers by foreign <em>state</em> investors, the Swiss foreign direct investment (<strong>FDI</strong>) regime will be relatively non-interventionist by international standards. This is in line with Switzerland&#8217;s traditionally open approach to foreign direct investment. The review of acquisitions by foreign state investors is intended to specifically address the security policy risks associated with foreign investment, while minimizing the negative impact on the welfare-enhancing effects attributed to foreign direct investment and limiting the burden on companies.</p>
<h3>B. Key features of the regulation</h3>
<h4>1. Purpose</h4>
<p>The Investment Screening Act (<strong>ISA</strong>) aims to protect public order and security in Switzerland.</p>
<p><em>Comment: </em>The legislature has refrained from pursuing any objectives beyond the public order and security of Switzerland. In particular, it has refrained from enshrining the supply of essential goods and services as an explicit objective of the law, although it was pointed out in parliamentary debates that this objective is covered by the protection of public order and security. This is in line with the international standard for FDI regimes, which generally pursue primarily security policy objectives.</p>
<h4>2. Notification obligation</h4>
<h4>2.1 Requirements</h4>
<p>A transaction is subject to a notification requirement if the following conditions are cumulatively met:</p>
<ol>
<li>A takeover;</li>
<li>of a domestic (Swiss) undertaking;</li>
<li>by a foreign state investor;</li>
<li>in a (security) critical sector;</li>
<li>where the relevant turnover thresholds are met.</li>
</ol>
<h4>2.1.1 Takeover</h4>
<p>The concept of a takeover (Art. 2(a) ISA) is linked to the concept of the acquisition of control under merger control law as defined in Art. 4(3) of the Cartel Act (<strong>CartA</strong>). Control is acquired if the investor has the possibility of exercising a decisive influence on the activities of another undertaking by determining the essential questions of management and general business policy (ISA Dispatch, p. 36).</p>
<p><em>Comment: </em>this requirement of control means that, unlike in Germany or France, notification is not required for the acquisition of a certain minority interest without the acquisition of (sole or joint) control. The link to established merger control practice seems appropriate and increases predictability for companies affected by a possible notification requirement, which must carry out a <em>self-assessment</em> . In practice, a uniform approach should be sought and deviations from investment control law (e.g., in the case of non-full-function joint ventures) should be prevented.</p>
<h4>2.1.2 Domestic (Swiss) undertaking</h4>
<p>The definition of an undertaking (Art. 2(b) ISA) is based on the functional approach taken under antitrust law (Art. 2(1<sup>bis</sup>) CartA). The decisive factor for qualification as an undertaking is therefore whether it is a consumer or supplier of goods or services in the economic process. Any undertaking that is entered in the Swiss commercial register is considered <em>domestic </em>(Art. 2(c) ISA).</p>
<p><em>Comment: </em>The formal criterion of entry in the commercial register is clear and practical, which is conducive to legal certainty. This means that branches can also qualify as domestic undertakings within the meaning of the ISA. Beyond that, there are no other requirements, such as the existence of assets in Switzerland.</p>
<h4>2.1.3 Foreign state investor</h4>
<p>Any of the following persons or entities intending to acquire a domestic undertaking is considered a foreign investor (Art. 2(d) ISA):</p>
<ul>
<li>foreign state bodies;</li>
<li>undertakings with their head office outside Switzerland that are directly or indirectly controlled by a foreign state body;</li>
<li>an undertaking with legal capacity that is directly or indirectly controlled by a foreign government agency; and</li>
<li>a natural or legal person acting on behalf of a foreign state body.</li>
</ul>
<p>However, the Federal Council may exempt takeovers by foreign state investors from certain countries from the notification obligation where there is sufficient cooperation between these countries and Switzerland to avert risks and threats to public order and security.</p>
<p><em>Comment: </em>The distinction between foreign state and non-state (private) investors is central to the scope of the FDI regime. The most significant case in practice, where an investor undertaking is controlled by a foreign state body, will be assessed under a test that is based on the concept of control under merger control law. In this regard, it is appropriate to refer to the established practice of the European Commission for assessing control of state-owned enterprises, which applies the following criteria:<a href="#_ftn1" name="_ftnref1">[1]</a></p>
<ul>
<li>the autonomy of the state-owned enterprise from the state in determining its strategy, business plan and budget; and</li>
<li>the state&#8217;s ability to coordinate business conduct by prescribing or facilitating coordination.</li>
</ul>
<p>In practice, it may be challenging to identify foreign state investors who operate behind the scenes or covertly. By also covering persons acting on behalf of a foreign state body, circumvention through &#171;straw man&#187; structures should be prevented. Relevant information can be obtained, if necessary, through the exchange of information from entries in transparency registers that identify the beneficial owners.</p>
<p>It is expected that the Federal Council will exercise its authority and exempt at least foreign investors from EU and EFTA countries from the notification obligation. Exemptions for other countries are also conceivable, especially if they grant reciprocity (i.e., investments by Swiss investors in the countries concerned are exempt from the review requirement).</p>
<h4>2.1.4 Security-critical sectors</h4>
<p>Only takeovers in legally defined sectors by foreign state-owned enterprises will require notification. A distinction is made between (i) areas that are particularly critical for public order and security, with a lower turnover or <em>de minimis</em> threshold, and (ii) areas with a higher turnover threshold.</p>
<p>(i) The most sensitive areas with a lower turnover or <em>de minimis</em> threshold relate to companies (Art. 3(1) ISA):</p>
<ul>
<li>that manufacture goods or transfer intellectual property that are of crucial importance for the operational capability of the Swiss Armed Forces, federal security institutions, and space programs, provided that their export abroad is subject to authorization under the War Material Act (<strong>WMA</strong>; armaments) or the Goods Control Act (<strong>GKG</strong>; in particular dual-use goods);</li>
<li>that operate or control the domestic transmission grid, certain distribution grids, large power plants, or high-pressure natural gas pipelines;</li>
<li>that supply water to at least 100,000 inhabitants;</li>
<li>that provide central security-related IT services.</li>
</ul>
<p>The companies in security-critical areas with a higher turnover threshold are (Art. 3(2) ISA):</p>
<ul>
<li>hospitals;</li>
<li>undertakings in the pharmaceutical, medical devices, vaccine, and personal protective equipment sectors;</li>
<li>undertakings that operate or control important domestic hubs (ports, airports, transshipment facilities for combined transport);</li>
<li>undertakings that operate or control railway infrastructure;</li>
<li>undertakings that operate or control food distribution centers;</li>
<li>undertakings that operate or control domestic telecommunications networks;</li>
<li>undertakings that operate or control financial market infrastructures; and</li>
<li>systemically important banks.</li>
</ul>
<p>In addition, the Federal Council will be authorized to subject further categories of domestic companies to the notification requirement for a limited period of 12 months (with the possibility of extension for a further 12 months) if this is necessary to ensure public order and security (Art. 3(3) ISA).</p>
<p><em>Comment: </em>Unlike certain investment control regimes in the international arena, critical key technologies such as artificial intelligence, robotics, semiconductors, cybersecurity, energy storage, quantum and nuclear technologies, and nano- and biotechnology will not be included among the areas covered. Extending the scope of investment control to these areas would require a formal amendment to the law – the conditions for the application of the Federal Council&#8217;s delegation norm are unlikely to be met on a regular basis. Anchoring all material requirements for notification at the legislative level also promotes legal certainty and predictability for companies.</p>
<h4>2.1.5 Turnover thresholds</h4>
<p><em>Lower turnover threshold (&#171;de minimis threshold&#187;).</em> The notification obligation will not apply to takeovers in the aforementioned particularly sensitive sectors if the <em>de minimis</em> threshold for the domestic undertaking (at least 50 full-time positions employees and turnover of CHF 10 million in the two previous financial years) is not reached (Art. 3(1) ISA).</p>
<p><em>Higher turnover threshold. </em>A higher turnover threshold will apply to other takeovers in critical sectors. This threshold is reached as soon as the global turnover of the domestic undertaking (including the entities it controls) exceeds CHF 100 million.</p>
<p><em>Comment. </em>The <em>de minimis</em> and higher turnover thresholds are justified for reasons of procedural efficiency. In individual cases, however, there is a risk that potentially security-relevant takeovers will remain exempt from the notification obligation. One example would be the acquisition of a domestic start-up in the security-relevant technology and industrial base (<strong>STIB</strong>) by a foreign state investor after it has developed a disruptive innovation in the defense sector.</p>
<h3>3. Approval criteria</h3>
<p>A notifiable takeover is approved if, on the basis of an <em>ex ante </em>assessment, &#171;there is no reason to believe that [&#8230;] public order or security is endangered or threatened&#187; (Art. 4(1) ISA). According to the dispatch, a risk assessment must be carried out based on the probability of occurrence and the potential extent of damage (ISA dispatch, p. 46).</p>
<p>Based on the approval criteria, an assessment must be made in connection with the probability of occurrence as to whether the foreign state investor enjoys a good reputation and offers a guarantee of impeccable business conduct (in particular, no involvement in a criminal organization; no espionage, etc.; Art. 4(2)(a)-(d)). Another relevant criterion for the potential extent of damage is the lack of substitutability of the services, products, or infrastructure of the domestic undertaking (Art. 4(2)(e) ISA; ISA Dispatch, p. 48).</p>
<p><em>Comment: </em>The approval criteria leave the authorities applying the law with a great deal of discretion due to the security policy objectives of the investment review. Security policy is a prerogative of the executive, which is why it must specify the undefined legal terms of public order and security on a case-by-case basis based on the actual threat situation.</p>
<h3>4. Procedure</h3>
<h4>4.1 Preliminary decision</h4>
<p>A domestic undertaking will be able to apply to the State Secretariat for Economic Affairs (<strong>SECO</strong>) for a binding preliminary decision on whether a takeover is subject to notification (Art. 5 ISA). SECO must decide within two months of receiving the complete application. A preliminary decision is valid for 12 months (with the possibility of a one-time extension for a further 12 months).</p>
<p><em>Comment: </em>In practice, the preliminary decision is likely to be of little significance, as unlike the notification, it would have to be obtained from the domestic undertaking and not from the foreign state investor. The two-month deadline for the preliminary decision is also unattractive compared to the one-month deadline for Phase I of the notification. Instead of a preliminary decision on the notification obligation, an application for approval in the form of a notification could be submitted directly. In this case, an application for a determination that no notification is required could be submitted, together with a contingent application for approval of the takeover.</p>
<h4>4.2 Approval procedure</h4>
<p>The approval procedure is based on the merger control procedure. The foreign investor must notify SECO of the notifiable takeover prior to its completion (Art. 6(1) ISA). Until approval is granted, the effectiveness of the takeover is suspended under civil law (Art. 8(4) ISA). There is a standstill obligation, which is enforced by administrative measures (Art. 19 ISA) and can be sanctioned with administrative penalties of up to 10% of the domestic undertaking&#8217;s global annual turnover (cf. Art. 20 ISA).</p>
<p>There will be a two-stage review process (Art. 6 et seq. ISA):</p>
<ul>
<li><em>Phase I. </em>Within one month of receiving the complete application, SECO, in agreement with the other administrative units concerned and after consulting the Federal Intelligence Service (<strong>FIS</strong>), decides whether the takeover can be approved directly or whether an examination procedure must be initiated (Art. 7(1) ISA). SECO and the administrative units concerned each have a right of veto: if no agreement can be reached between them, an examination procedure (Phase II) must be initiated (Art. 7(2) ISA).</li>
<li><em>Phase II. </em>As part of an in-depth review, SECO generally decides within three months of the initiation of the review procedure whether the takeover will be approved; the decision is made in agreement with the administrative units concerned and after consultation with the FIS (Art. 8(1) ISA). Even if the deadline expires, (deemed) approval is granted (Art. 9(1) ISA). If SECO or an administrative unit with an interest in the matter opposes the approval, or if the decision has significant political implications, the approval authority is transferred to the Federal Council (Art. 8(2) ISA). Only the Federal Council can decide not to approve a takeover (Art. 8(2)(a) ISA).</li>
</ul>
<p>Decisions made as part of an approval procedure can be appealed to the Federal Administrative Court. The foreign investor and the domestic undertaking are entitled to appeal (Art. 18(2) ISA).</p>
<p><em>Comment: </em>The two-stage procedure (process and deadlines) based on the tried-and-tested merger control law seems appropriate. As in merger control, Phase I only begins upon receipt of the complete application; SECO confirms that the application is complete (ISA Dispatch, p. 51). This suggests that a <em>pre-notification </em>procedure modeled on merger control practice should be possible. SECO has the option of extending the statutory deadlines, for example if information from a foreign authority is pending or if the Federal Council is deciding on approval. Since no maximum statutory deadlines are defined, this carries the risk of excessively long approval procedures, especially since information from foreign authorities can notoriously take a long time to obtain.</p>
<p>The sanctions that can be imposed in the event of a violation of the prohibition on implementation are much more severe than the corresponding provision in merger control, where a violation of the prohibition on implementation can be sanctioned with a maximum fine of CHF 1 million.</p>
<h3>C. Practical significance and outlook</h3>
<p>By limiting its FDI regime to foreign <em>state </em>investors, Switzerland has opted for a less interventionist regulatory approach. <em>Private </em>foreign investors are <em>not </em>subject to investment control. It is estimated that only a small single-digit number of acquisitions will be subject to approval each year. Switzerland thus remains open to foreign direct investment, as the existing differentiated framework of sector-specific regulations continues to apply to private foreign investors.</p>
<p>Swiss investment control is of practical significance for foreign state investors, who must be prepared for the possibility that they may require approval in future if they invest in one of the critical sectors. In the case of such potentially problematic takeovers, it is advisable to make contractual provisions for a possible longer review period or non-approval.</p>
<p>In order to limit the burden on reporting companies, it would be welcome to develop procedural simplifications for unproblematic cases, as is sometimes done in merger control. In particular, it would be disproportionate if further information on the companies&#8250; business activities and markets (such as customers and suppliers, competitors, and market shares) had to be provided in every case.</p>
<p>The Investment Screening Act is subject to a facultative referendum. In addition, the Federal Council will issue an ordinance containing the implementing provisions for investment screening. For these reasons, the Swiss investment control regime is expected to come into force in 2027 at the earliest.</p>
<h6><a href="#_ftnref1" name="_ftn1">[1]</a> COMP M.7850, EDF/CGN/NNB Group of Companies, paras. 29-50; COMP M.7643, CNRC/Pirelli, paras. 8-21; COMP M.7962, ChemChina/Syngenta, paras. 81-88.</h6>


Homburger_Illu_Investitionskontrolle_Preview_2020_10

Switzerland Introduces a Targeted FDI Regime

Investment Products

Employment and Executive Compensation

Compliance

Corporate Governance

Data Protection

Financing

Financial Market Regulation

Corporate / M&A

Healthcare / Life Sciences

Real Estate

IP / IT

Capital Markets

Private Clients

Litigation

Regulatory

Restructuring and Special Situations

Arbitration

Investigations

Insurance

Competition

Homburger News

Legal 500 Rankings 2026: Homburger top ranked in 14 categories

<p>Legal 500 has ranked Homburger Tier 1 in 14 categories and recognized in an additional 8 practice areas: Banking and Finance; Capital Markets; Commercial, Corporate and M&amp;A; Competition; Construction; Data Privacy and Data Protection; Dispute Resolution: Arbitration; Dispute Resolution: Litigation; Employment; Fintech; Healthcare and Life Sciences; Insolvency and Corporate Recovery; Insurance; Intellectual Property; Private Client; Public Law; Real Estate; Regulatory, Compliance and Investigations; Sports Law; Tax; TMT and Transport.</p>
<p>Over all ranked categories, 57 of our lawyers achieved individual rankings.</p>
<p>Legal 500 as a part of Legalease, a provider of legal market information, analyses the capabilities of law firms across the world and publishes annual rankings based upon extensive research.</p>


Homburger advised CDR-Life AG on a new global licensing agreement with Boehringer Ingelheim

<p>On November 4, 2025, CDR-Life and Boehringer Ingelheim announced a new global licensing agreement to develop CDR-Life’s unique antibody-based molecule CDR111 for autoimmune diseases. The agreement builds on the companies’ successful collaboration on an investigational antibody fragment. Under the terms of the agreement, CDR-Life is eligible for up to a total of CHF 456 m in payments, including CHF 38 m in upfront and near-term payments, plus tiered royalties on future sales.</p>
<p>Homburger acted as counsel to CDR-Life AG. The Homburger team was led by Luca Dal Molin (IP / IT) and included Richard Stäuber (Regulatory) and Joel Fink (IP / IT).</p>


Share-Image Teamplate Deals-and-Cases

Homburger advises Marex Group plc on the acquisition of Valcourt SA

<p>On October 22, 2025, Marex Group plc, a diversified global financial services platform, announced that it had agreed to acquire Valcourt SA.</p>
<p>Valcourt is a fixed-income market maker based in Geneva, Switzerland, specializing in fixed-income instruments such as high-yield, subordinated, emerging markets, private, illiquid, and sustainable debt. The acquisition will add 700 clients, ranging from banks, independent wealth managers and asset managers.</p>
<p>The acquisition is expected to enhance Marex’s fixed-income business and bring a substantial distribution offering that serves the Swiss institutional community, in particular private banks, and wealth and asset management companies, consistent with Marex’s strategy to add new clients and new capabilities to its platform to diversify earnings.</p>
<p>The deal is subject to regulatory approval and is expected to close in the first half of 2026.</p>
<p>The Homburger team comprises Andreas Müller, Thierry Burckhardt (both Corporate / M&amp;A), Benjamin Leisinger, Carla Bertossa (both Regulatory), and Philippe Gobet (Tax).</p>


Regulatory

Main Contacts

Stricter Rules for Trading Cultural Property

Parliament Passes
Revision to
Swiss Cartel Act

Switzerland Introduces a Targeted FDI Regime

Legal 500 Rankings 2026: Homburger top ranked in 14 categories

Homburger advised CDR-Life AG on a new global licensing agreement with Boehringer Ingelheim

Homburger advises Marex Group plc on the acquisition of Valcourt SA

Proposed regulation of payment instrument institutions under the Swiss Financial Institutions Act: a critical analysis

Intellectual Property Licensing and Competition Law

Fintech 2026: Switzerland

Regulatory

Main Contacts

Stricter Rules for Trading Cultural Property

Parliament Passes Revision to Swiss Cartel Act

Switzerland Introduces a Targeted FDI Regime

Legal 500 Rankings 2026: Homburger top ranked in 14 categories

Homburger advised CDR-Life AG on a new global licensing agreement with Boehringer Ingelheim

Homburger advises Marex Group plc on the acquisition of Valcourt SA

Proposed regulation of payment instrument institutions under the Swiss Financial Institutions Act: a critical analysis

Intellectual Property Licensing and Competition Law

Fintech 2026: Switzerland

Parliament Passes
Revision to
Swiss Cartel Act