Licensable Backoffice Activities and Liquidation of Branches of Foreign Banks

Facts

Parties: UIB Servizi SA, UIB Gestioni Patrimoniali SA, United Investment Bank Ltd, Intersmi Gestao e Investimentos Lda against Swiss Federal Banking Commission (SFBC).

Court: Swiss Federal Supreme Court, II. Public Law Division.

Date: July 15, 2004.

Main Issue: The SFBC prohibited the companies UIB Servizi SA and UIB Gestioni Patrimoniali SA from engaging in activities relevant under financial market law and ordered the registration of branches of United Investment Bank Ltd and Intersmi Gestao e Investimentos Lda in the commercial register as well as their liquidation. The appellants disputed the requirement for a license for their activities and appealed against the measures of the SFBC.

Relevant Topics: Licensing requirement for backoffice activities, appointment of an observer, procedural minimal guarantees, territorial application of the AMLA, publication of the final decision, professional prohibition, cost control, access to files, violation of the right to be heard.

Considerations

The Swiss Federal Banking Commission (SFBC) is authorized to monitor compliance with banking and financial market law provisions and to issue necessary decisions. It can appoint an observer if there are concrete indications of an activity requiring a license and the facts can only be finally clarified by an on-site inspection. The appointment of an observer is not tied to the determination of a specific violation of the law, but is sufficient if there are objective indications.

In the present case, the SFBC rightly appointed an observer, as there were sufficiently concrete indications of an activity requiring a license by UIB Servizi SA and UIB Gestioni Patrimoniali SA. The appointment of the observer was proportionate and corresponded to the constitutional and administrative law principles. The appellants had the opportunity to comment on the measures of the SFBC and to submit their statements in the proceedings.

The SFBC correctly found that UIB Servizi SA and UIB Gestioni Patrimoniali SA had carried out activities in Switzerland that required a license for United Investment Bank Ltd and Intersmi Gestao e Investimentos Lda. These…