Know your Swiss Corporate Reporting and Due Diligence Obligations

Switzerland has introduced new Corporate Reporting and Due Diligence obligations in connection with conflict minerals and child labour to improve human rights protections around the world.

Switzerland is following international trends and regulations for non-financial reporting and human rights due diligence and the reforms include new rules in the Swiss Code of Obligations related to the trade of minerals and metal ores originating from conflict-affected zones. The resources are reportedly being extracted using forced labour and are a known source of finance for armed conflict, says the EU. The EU implemented the Conflict Minerals Regulation last year as a means of restricting access to these natural resources.

Companies with registered offices or principal places of business in Switzerland have to comply with these due diligence obligations in their supply chain when dealing with the highlighted minerals and metals in Switzerland. They also need to comply with the due diligence duties if they offer goods or services that have suspected links to child labour. The import and processing of recycled materials are not subject to the new rules.

Requirements for Corporate Reporting and Due Diligence 

These corporate reporting and due diligence obligations will apply from the start of the financial year in 2023 to Swiss companies of public interest, which as a group together with their controlled companies in Switzerland and abroad meet both of the following requirements over two consecutive financial years:

• The group has at least 500 full-time employees (FTEs) on an annual average; and
• The group exceeds either total assets of 20 million Swiss francs or a minimum turnover of 40 million Swiss francs.

Companies’ annual reports should cover environmental, social, and employee aspects, human rights, and anti-corruption. It must outline risks and mitigation measures and the relevant due diligence concepts adopted. Foreign companies related to the corporation must also be covered in the report approved by management and shareholders and must remain public for 10 years.

The first reports have to be published in 2024 and failure to do so may result in a fine of up to 100,000 Swiss francs. A report need not be prepared if a written explanation for its absence is provided.

Businesses are required to have or put in place a suitable management system containing their supply chain policy, a system of supply chain traceability, risk assessments, and mitigation measures. This information must be available through on-site controls, and communications with authorities and civil society.

Companies should publish reports on due diligence obligations. These should be accessible for at least 10 years. Making false statements in a report, or failing to comply with the reporting obligation, may lead to a fine of up to 100,000 Swiss francs. Where the failures are negligent rather than intentional, a fine of up to 50,000 Swiss francs could be imposed.
LET’S TALK ABOUT CORPORATE REPORTING AND DUE DILIGENCE LAW

Exemptions to the requirements exist for businesses with fewer than 500 employees and assets of less than 20 million Swiss francs or a turnover of under 40 million Swiss francs. Large corporations can also apply for exemption provided that they demonstrate their supply chain contains a low risk of child labour or that they respect internationally recognised conventions such as the UN Guiding Principles on Business and Human Rights.

As the ecosystem of corporate responsibility for companies is developing quickly, navigating it safely in the interest of rights-holders requires monitoring corporate behaviour and ensuring that mandatory due diligence requirements can live up to the expectations and deliver results.

Due Diligence investigations: Mitigate Critical Risks

At CRI®, we provide corporate reporting and due diligence services wherever you are. Use our DueDiligence360™ reports to help you comply with anti-money laundering, anti-bribery, and anti-corruption regulations ahead of a merger, acquisition, or joint venture. You can also use them for third-party risk assessment, onboarding decision-making, and identifying beneficial ownership structures.

Due Diligence helps you Identify key risk issues clearly and concisely using accurate information in a well-structured and transparent report format. Our comprehensive range of reports includes specialised reports that support specific compliance requirements. Protect your reputation and the risk of financial damage and regulator action using our detailed reports. They enhance your knowledge and understanding of the customer, supplier, and third-party risk, helping you avoid those involved with financial crime.

The CRI Group™ invites you to schedule a quick appointment with them to discuss in more detail how conducting due diligence and compliance can help you and your organisation.

Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, TPRM, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider.

We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group™ also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
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