Historical summary of the issue of dormant accounts in Swiss banks
(From 1946 to 2000)
25 May 1946 : By signing the Washington Agreement, Switzerland agrees to consider with « benevolence » the issue of dormant accounts belonging to Holocaust victims.
1947: bank research uncovers nearly half a million Swiss francs (482,000 francs) that apparently belonged to victims of the Third Reich. This sum increases to 862,000 francs by 1956.
20 December 1962 : The Swiss Federal Council adopts the so-called Registration Decree ordering the registration of dormant bank accounts whose holders had made no contact since 9 May 1945. Some ten million Swiss francs were uncovered in this way by 1973. Assets whose owners were not found were put into the “dormant accounts” fund. The total sum of this fund, around 3 million francs, was attributed in 1975 and 1979 in the proportion of two thirds to the Swiss Federation of Jewish Communities and one third to the Swiss Federal Office for Refugees.
With renewed hope of finding the legitimate holders of these accounts, the Federal Council established a central information service where claims could be made until September 1999.
1994-1995 : A parliamentary initiative is filed in Switzerland, requesting a federal decree for identifying and returning the assets.
10 September 1995 : Edgar Bronfman, president of the World Jewish Congress, is named by the government of Israel and Jewish organizations to head the negotiations on the dormant accounts issue.
1 January 1996 : the Swiss Bankers Association (SBA) Directive on dormant funds comes into effect. This directive concerns the treatment of accounts, deposits and safe deposit boxes in Swiss banks when the bank has not heard from the client. If the bank is without news of the account holder for 10 years or more, security measures are to be taken to safeguard the client’s interests or those of his inheritors.
January 1996 : the SBA creates the Research Office in conjunction with the Swiss Banking Ombudsman for unclaimed assets in Swiss banks. In this way, a person can ask the office to make inquiries to all the banks in Switzerland if he can plausibly establish that, without knowing the bank in question, he is the heir of a Swiss bank account holder who is deceased or has disappeared for more than ten years.
Thanks to the action of the Banking Ombudsman, almost 19 million Swiss francs lying in dormant accounts have been restituted to their legitimate owners. Of this amount, 14 cases representing 10.7 million francs concerned assets that were dormant since 1945 or earlier. 9 of these concerned Holocaust victims, for a total of 10 million francs.
7 February 1996 : the ASB-named mediator identifies 38.7 million francs in 775 dormant accounts that were opened before 1945 after preliminary research in banks and financial institutions.
2 May 1996 : Swiss banks and Jewish organizations accept the creation of the Independent Committee of Eminent Persons (the “Volcker Commission”). The commission is mandated to conduct an investigative audit of Swiss bank accounts that have been dormant since the end of the Second World War. The Committee begins work in August and puts out a call for tenders to independent auditing companies.
June 1996 : the bank auditing begins.
23 October 1996 : the Federal Council creates a Dormant Accounts Task Force within the Department of Foreign Affairs. The Task Force has the mission of coordinating research at the federal level on the role of Switzerland during the Second World War. It is composed of some twenty collaborators under the direction of Ambassador Thomas Borer.
13 December 1996 : the Federal Council nominates an independent commission of historians (the Bergier Commission, or the Independent Commission of Experts) with the mandate of investigating the role of Switzerland during World War Two.
26 February 1997 : the Federal Council approves an « Executive Ordinance Concerning the Special Fund for Needy Victims of the Holocaust/Shoah ». The main banks and the Swiss Confederation pay 170 million Swiss francs into an account at the Swiss National Bank (SNB). The SNB later contributes another 100 million francs.
November 1997 : the Special Fund for holocaust victims transfers the first 15 million francs to the World Jewish Restitution Organization for the support of Jewish Holocaust survivors in Eastern Europe. In May 1998 the Special Fund, under the direction of Rolf Bloch, distributes another 60 million francs, principally towards the U.S.A. Another 4 million francs are released towards more than 2000 Gypsy victims of Nazi persecution, primarily resident in Germany, which constitutes the largest funds distribution ever towards non-Jewish victims.
By the end of 1999, approximately 92% of the Fund had been allocated, of which 65 million Swiss francs went to Eastern Europe and 44 million to the United States. The remainder went to former victims residing in Israel and Western Europe. 27 million francs were given to non-Jewish Holocaust victims.
July and October 1997 : the Swiss Bankers Association publishes two lists of dormant account holders. Foreign holders constitute 5570 names for a total of 67 million francs. 1730 persons submit 9000 claims.
30 September 1997 : the Volcker commission establishes the independent Claims Resolution Tribunal for dormant account claims. The chairman of the tribunal is Hans Michael Riemer, a professor of private law at the University of Zurich and an ordinary judge of the Court of Cassation of the Canton of Zurich. The vice president is Thomas Buergenthal, a professor at George Washington University Law School and a former member of the United Nations Human Rights Committee. 15 other arbitrators complete the tribunal.
5 May 1998 : the Bergier Commission publicly presents in Zurich the Interim Report on Switzerland and Gold Transactions in the Second World War. This document illustrates the role of Switzerland as a « business hub » for gold transiting from countries under the domination of the Third Reich.
24 June 1998 : The legal drafts for establishing the Swiss Solidarity Foundation, first announced in the spring of 1997, are released by the Federal Council. With the idea of prevention as a guiding principle, the Foundation’s purpose would be to promote social solidarity in order to attenuate poverty, misery and violence. It would expressly encourage the Swiss populace to help in a strong and durable manner the rehabilitation of the victims of violence, torture and genocide and it would support efforts of remembrance, reconciliation and prevention of conflicts, genocide and war. The Foundation would dispose of 7 billion francs in funding, some of which would come from the sale of excess gold reserves held by the Swiss National Bank.
End of June 1998 : negotiations stall between the Swiss banks and Holocaust survivors and descendents : bankers, lawyers and the Jewish World Congress (JWC) had imposed a deadline of June 30 for agreement, but the different parties fail to concur with regard to compensation.
12 August 1998 : a global extra-judiciary settlement is arrived at in New York between the UBS and the Credit Suisse banks on the one hand and the plaintiffs’ lawyers and the JWC on the other. All complaints against Switzerland and Swiss banks are lifted against payment of 1.25 billion dollars.
This agreement dispels the menace of sanctions which had been proffered since the first of July by various American cities and states towards Swiss banks and export producers. These embargo threats ranged from withdrawing money to totally boycotting Swiss products. The UBS (meaning the former UBS and SBS banks, since merged) is required to pay two thirds of the settlement and the Credit Suisse one third. The total sum is to be allocated over three years to plaintiffs in the U.S., Shoah survivors and Jewish organizations.
End of January 1999 : during the Davos summit meeting, Swiss Confederation president Ruth Dreifuss and U.S. vice president Al Gore present a joint declaration to the effect that the controversy between the two countries is over.
End of March 1999 : the Task Force Switzerland – World War Two is dissolved by the Federal Council. It is replaced by the Switzerland - World War Two Office, which is put in place within the Foreign Affairs Department to ensure proper follow-up of the remaining work and coordination with the federal administration on the subject.
End of April 1999 : research regarding the dormant accounts is terminated.
Summer of 1999 : Following the research conducted on dormant accounts, the Swiss Bankers Association further clarifies its directives of 8 September 1996, with the goal of avoiding assets falling dormant in future and facilitating research into such dormant accounts. The SBA Directives emphasize the active searching of account holders by banking institutions. From the year 2000, a computerized central office is to be set up for that purpose. These directives fill in the gap until the new federal law on dormant assets that is currently being prepared is enacted. The new legislation should concern the entire financial sector and contain specific regulations regarding dormant assets dating from before 1945.
6 December 1999 : the Volcker Commission presents its final report.
10 December 1999 : The Bergier Commission publishes its second interim report.
End of December 1999 : in New York, Judge Korman formally ratifies the agreement between the Swiss banks and Jewish plaintiffs and decides on the distribution of the unclaimed portion of the 1.25 billion settlement. This job goes to Judah Gribetz, with an initial apportionment plan to be presented by March 2000 containing the relative allotments to individual plaintiffs and Jewish organizations. Lawyers’ fees of over 13.5 million dollars are also to be taken out of the overall 1.25 billion settlement. The final version of the Gribetz plan was to be approved on 15 June 2000, and the distribution of funds was to begin that summer.
February 2000 : the Swiss Bankers Association (SBA) publishes its new Directives relative to the treatment of assets (accounts, deposits and safe-deposit boxes) in Swiss banks when the bank is without news of the client.
These Directives, which replace those of 8 December 1995, no longer assume that assets become dormant after 10 years but refer instead to the occurrence of certain events. If the client has made no contact, the bank must attempt to re-establish communication. In this regard, the Directives make a distinction between investigative measures taken by the bank (active measures) and those taken by the client or his inheritors (passive measures), and the bank is now responsible for taking active measures once it notices that contact has been lost. The Directives also regulate the manner in which dormant accounts should be managed in order to safeguard client interests.
What are the next events to come regarding the dormant accounts issue ?
Spring of 2000 : the Federal Banking Commission must independently decide whether to follow the recommendation of the Volcker Commission to publish the names of dormant bank account holders on the Internet.
1 July 2000 : the new SBA Directives come into effect.
The Claims Resolution Tribunal, created in October 1997 in Zurich, now has the responsibility of processing claims that are submitted following the publication of the dormant account holder names. At this point it has examined 9776 claims concerning around half of the 5570 names that were published in the press in 1997. In November 1999 it had resolved 1221 claims and awarded more than 22 million francs, representing approximately one third of the 72 million franc value of the same accounts. Around 80% of the claims do not concern Holocaust victim accounts.