EU Benchmarks Regulation and Market Impact as of 1 January 2018

The new EU Benchmarks Regulation (BMR) was published in June 2016 and most rules will apply as of 1 January 2018. The BMR introduces new compliance requirements for benchmark administrators, contributors, and users, with regard to interest rate, foreign exchange, security, commodity, and other benchmarks used in financial transactions. The BMR was enacted in response to public pressure resulting from the aftermath of the LIBOR scandals and follows the recommendations of the IOSCO and ESMA EBA Principles.

Executive summary

Functioning benchmarks are key to ensuring the smooth functioning of financial markets. However, they lead to conflicts of interest and other integrity issues on the part of contributors of input data and administrators. The scope of the BMR covers all published benchmarks which are used in the European Union with regard to associating financial instruments, financial contracts and/or fund managers. The BMR defines obligations and conduct requirements for both administrators and contributors to ensure market integrity. The Regulation has an extraterritorial dimension in cases where third country administrators request market access. Market access can be granted on the basis of equivalence, recognition, and endorsement by an EU supervised entity. All the legal requirements of the BMR will phase-in on 1 January 2018 and take effect on 1 January 2020 – except for the EURIBOR, which is subject to the BMR today.

What is a benchmark?

A benchmark is defined as “a reference index, to which the amount payable under a financial instrument or a financial contract, or the value of a financial instrument, is determined, or an index that is used to measure the performance of an investment fund with the purpose of tracking the return of such index or of defining the asset allocation of a portfolio or of computing the performance fees” (Article 3(1)(3) BMR).  Such an index is a figure, fulfilling one of the following criteria:

  1. Published or made publicly available;
  2. Determined at a regular interval by either:
    • partially or entirely applying a formula or any other method of calculation, or another means to assess it by; and
    • on the basis of the value of one or more underlying assets or prices, including estimates of prices, actual or estimated interest rates, quotes and committed quotes, or other values or surveys.

Derivatives as defined in Section C, Annex I, Directive 2014/65/EU do not qualify as an index where there is only a single reference value. Such is the case where a single price or value is used as a reference for a financial instrument, e.g. the reference price for a future or option, without any calculation, input data or discretion. Equally, reference or settlement prices produced by central counterparties are not considered to be benchmarks.

Who will be affected?

While the IOSCO Principles are the basis of the BMR, the Principles included the concept of “comply or explain”; this exemption with respect to proportionality and the nature of the benchmark is only included to a limited extent in the BMR. In order to comply with the new Regulation, administrators of a benchmark will either have to apply for registration or for authorisation, depending on the type of benchmark they provide. The provision of critical and significant benchmarks, as well as commodity and interest rate benchmarks, requires an application, while in all other cases registration with the designated authority will suffice.

  • Administrators: An administrator can be either a natural person or a legal entity with control over the provision of a benchmark, in particular by administering the arrangements determining the benchmark, by collecting and analysing the input data, as well as by determining the rate of the benchmark, and by publishing it. While specific functions of the administrator can be outsourced to a third party, the sole act of publishing or referring to an existing benchmark is insufficient for an individual or an entity to be considered as the benchmark administrator. Control of provision of the benchmark is a necessary regulatory requirement for the provider to become subject to the BMR.
  • (Supervised) Contributors: The two types of contributors are differentiated in that any natural person or legal entity can contribute input data as a “contributor”, but only a “supervised contributor” can contribute input data to an administrator located in the EU as a supervised entity and the contributor has to comply with more stringent requirements, in accordance with Article 16 BMR. The quality and reliability of any benchmark is based on the integrity and accuracy of the input data, which is provided by the contributor. To prevent manipulation at data contribution level, contributors are subject to stringent rules under the BMR. The administrator has to ensure contributors adhere to the code of conduct and that input data is of the required integrity and can be validated, even if the contributor is located in a third country. Any omission by a contributor providing input data to a critical benchmark can undermine the credibility and representativeness of such a benchmark, with severe impact on the underlying market and economic reality. As such, national authorities are given the power to demand mandatory contributions from supervised contributors to critical benchmarks.
  • User of a benchmark: A supervised entity may use a benchmark or a combination of benchmarks in the EU if the benchmark is provided by an administrator located in the Union and included in the register or is a benchmark which is included in the register. Where the object of a prospectus is transferable securities or other investment products that reference a benchmark, the issuer, offeror, or person asking for admission to trade on a regulated market shall ensure that the prospectus also includes clear and prominent information stating whether the benchmark is provided by an administrator included in the register.

Which benchmarks will be affected?

The BMR subdivides the benchmarks into various subcategories, based on the type of market they reproduce. The Regulation contains specific additional requirements for both commodity and interest rate benchmarks. The following provides an overview of the various subcategories of benchmarks:

Type of Benchmark Description
Regulated Data Benchmark Data input for the benchmark is provided directly from regulated venues. Certain provisions of the BMR do not apply to regulated data benchmarks, and they cannot be classified as critical.
Interest Rate Benchmark An IR Benchmark is determined on the basis of the rate at which banks may lend or borrow from other banks or agents in the money markets. They are subject to the requirements set out in Annex I BMR. Provisions of the BMR relating to significant and non-significant benchmarks do not apply.
Commodities Benchmark The basis for the benchmark is a commodity as defined by MiFID II. Commodity Benchmarks are subject to the requirements of Annex II BMR, unless the benchmark also qualifies a regulated data benchmark, or is based on submissions from mainly supervised entities. Provisions of the BMR relating to significant and non-significant benchmarks do not apply.
Critical Benchmark To qualify as a critical benchmark, the value of the underlying contracts needs to be at least EUR 500 bn, or it has to have been recognised as critical in a member state. Critical benchmarks are subject to more stringent and specific requirements than other types of benchmarks.

A framework has been developed by ESMA to determine Interbank Offered Rates benchmarks (IBORs) and the Euro Over Night Index Average (EONIA) as critical benchmarks. To date, only EURIBOR has been qualified as such by the EC.

Significant Benchmark Requires the value of underlying contracts to be at least EUR 50 bn, or there to be none or very few market-led substitutes, leading to significant impact on financial stability, if the benchmark ceases to be produced.
Non-Significant Benchmark All other benchmarks where the benchmark is neither a commodity nor an interest rate benchmark and the value of underlying contracts of the benchmark is less than EUR 50 bn.

How will a Switzerland-based benchmark provider be affected?

Non-EU administrators are subject to BMR rules where they intend to obtain EU market access; non-compliance will likely lead to these non-EU benchmarks being denied EU market access. There are three ways for third country administrators to become compliant: equivalence, recognition, and endorsement. Firstly, an equivalence decision with regard to foreign jurisdictions can be made by the European Commission if the requirements of Article 30(1) BMR are met and this results in benchmarks from relevant third country jurisdictions being eligible for use by supervised entities in the EU. Secondly, where an administrator located in a third country provides proof of compliance with the IOSCO Principles and said compliance is equivalent to the BMR, the administrator should be recognised as an administrator within the EU. An administrator located in a third country, such as Switzerland, must have a legal representative in the reference member state, if the entity intends to obtain recognition. The legal representative must oversee the provision of benchmarks as performed by the administrator and is accountable to the competent EU member state authority. Finally, market access as a third country administrator can be gained through an endorsement by an administrator of a supervised entity located in the EU. Endorsement will permit market access where the third country administrator adheres to the IOSCO Principles and such adherence results in equivalent compliance with the BMR.

Obligations for administrators and contributors

The BMR directly imposes a variety of obligations on persons involved in the provision, contribution, and use of benchmarks throughout the EU to prevent conflicts of interest and manipulation of benchmarks as well as to ensure maximum harmonisation in cross-border applications. If tasks are outsourced to an external service provider the provider also has to adhere to the BMR. In particular, the administrator is required to provide a code of conduct specifying the requirements and responsibilities regarding input data and to supervise adherence to the code, even if the contributor is located in a third country.

The obligations include the following provisions for administrators:

  • Robust governance arrangements, including a clearly organisational structure with well-defined, transparent and consistent roles and responsibilities for all involved, preventing conflicts of interest (Article 4 BMR).
  • Develop and maintain robust procedures to ensure oversight of all aspects of the provision of a benchmark and communication with the relevant competent authorities (Article 5 BMR).
  • Ongoing control of benchmarks to ensure they are provided, published and/or made available in accordance with the Regulation, and maintained through an accountability framework, record-keeping, auditing, and review and complaints handling process (Article 6 to Article 9 BMR). These frameworks must include any third party to which a task has been outsourced (Article 10 BMR).
  • The administrator is also responsible for overseeing the quality of input data and reporting any infringements without delay to the competent authority (Article 11 to Article 15 BMR).

The obligations include the following provisions for contributors:

  • The contributor must adhere to the code of conduct provided by the administrator and the specific requirements prescribed with respect to the contribution of input data (Article 15 BMR).
  • Supervised contributors must also ensure input data is not affected by any existing or potential conflicts of interest and that all discretion is exercised in an independent and honest way (Article 16 BMR).

Typical products in scope

Entry into force

The BMR will enter into force on 1 January 2018. There is a transition period for certain new and existing benchmarks until 1 January 2020. In accordance with the transitional provisions of Article 51(3) BMR, ESMA considers existing benchmarks as including benchmarks “existing on or before 1 January 2018”, including those provided for the first time on or before 1 January 2018. Thus, an EU index provider may provide a benchmark created between 30 June 2016 and 1 January 2018, including updates and modifications, to supervised entities in the EU until 1 January 2020, even if authorisation or registration has not yet been granted, unless authorisation or registration has been refused.

The BMR has applied to the EURIBOR since 12 August 2016, following qualification as a critical benchmark.


The BMR is a highly complex regulation with implications for all market participants. It requires considerable time to plan, structure, and implement the requirements set forth in accordance with the IOSCO Principles and EU regulations. The requirements have a direct impact on the usage of benchmarks, provision of input data, and cross-border market access.

Please contact our experts on this topic for a free consultation:

Martin Liebi
Tel: +41 58 792 2886

Alexandra Balmer
Legal FS Regulatory & Compliance Services
Tel: +41 58 792 1424

The New EU Prospectus Regulation and its impact on Swiss-based issuers and their KIDs under PRIIPs

The new EU Prospectus Regulation (“PR”) was adopted by the European Council on 16 May 2017 and will enter into force on 20 July 2017. The PR is the latest regulation issued by the European Capital Markets Union (“CMU”) and should become reality by 2019. The PR is based on and further clarifies the existing EU Prospectus Directive. It contains provisions that are directly applicable in all EU member states without discretion, but that also apply in particular to Swiss-based issuers and their agents offering securities in the EU or admitting transferable securities to trading on regulated markets located in the EU such as EUREX. One of the main goals of the PR is to reduce the length of prospectuses by providing clear and detailed guidelines of how to create a prospectus. This newsletter gives a short overview of the key content of the PR and explains in particular how it will be applicable to Swiss-based issuers and their agents.

1. Executive Summary

The PR particularly affects Swiss-based issuers and their agents publicly offering transferable securities in the EU and admitting transferable securities to EU regulated markets such as EUREX.

Most financial instruments, such as shares, bonds, warrants and structured products come under its scope, except for units in collective investment schemes which are not close-ended. There are detailed new requirements related to the content, scope, length, formalities and other requirements of a prospectus.

The summary of a prospectus can be used instead of a KID created under PRIIPs. Issuers should therefore investigate operational and legal synergies between the PR and the KID. Consequently, the PR should be addressed now despite the fact that most provisions will not enter into force until 21 July 2019.

2. When a prospectus is required

A prospectus must be published when transferable securities are offered to the public in the EU or admitted to trading on regulated markets located in the EU by means of a communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe to the securities in question.

The prospectus obligation applies to both equity and non-equity securities entitling the holder either to acquire transferable securities or to receive a cash amount through a cash settlement determined by reference to other instruments, notably transferable securities, currencies, interest rates or yields, commodities or other indices or measures. It covers in particular warrants, covered warrants, certificates, structured products, and securities convertible at the option of the investor, but not units in collective investment schemes other than the closed-end types.

No public offer of transferable securities is deemed an offer to qualified investors in the sense of MiFID II (safe harbour). Any resale to the public of transferable securities first placed with qualified investors or admitted to trading on a regulated market will however require the publication of a prospectus. Offers to fewer than 150 natural or legal persons per EU Member State are not deemed to be public, nor are offers of securities with denominations per unit amounting to at least EUR 100,000 or offers of securities addressed to investors who acquire securities for a total consideration of at least EUR 100,000 per investor. There are also multiple exemptions applicable to securities traded on a regulated market.

Resales of transferable securities in the scope of the PR are generally treated as separate offers and are subject to a prospectus, unless an exemption applies. No additional prospectus is required as long as a valid prospectus is available. A prospectus is valid for 12 months from the date of approval of the offer or the admission to trading and the date on which the issuer or the person responsible for drawing up the prospectus consents to its use in written form.

It is possible to voluntarily draw up a prospectus in accordance with the provisions of the PR even if the offer would be outside the scope of application of the PR. Such prospectuses are subject to all the rights and obligations of a prospectus created according to the PR.

3. The issuer of a prospectus

The issuer who issues or proposes to issue securities, the offeror who offers securities to the public, or a mandated third party such as a bank, is responsible for ensuring that the prospectus provides sufficient information to enable investors to make informed investment decisions.

The liability for the information given in the prospectus, and any supplement thereto, lies at the very least with the issuer, or its administrative, management or supervisory bodies, the offeror, the person asking for the admission to trading on a regulated market, or the guarantor. The persons responsible for the prospectus must be clearly identified in the prospectus. Civil liability remains with the individual EU member states.

4. When do Swiss-based issuers have to issue a prospectus?

Any non-EU domiciled issuer, such as a Swiss issuer, bank or intermediary, can offer transferable securities in the EU or seek admission to trading of securities on a regulated market established in the EU, such as EUREX, if a prospectus is drawn up and approved by the competent authorities according to the PR. It is to be expected that the corresponding Swiss prospectus requirements will be equivalent to the prospectus requirements under the PR. The Swiss requirements are currently undergoing a revision in the context of the debate on the Swiss Financial Services Act (FinSA) in the Swiss parliament. As a result, competent authorities may in future even approve prospectuses issued under Swiss law if certain additional requirements are met.

5. The Key Types of Prospectuses

6. The prospectus approval process

Any prospectus and all its constituent parts must be approved by the competent authority prior to publication. Any of the constituent parts can be approved separately. The competent authority is generally the EU member state where the issuer has its registered office or, in the case of a third-country issuer such as a Swiss bank, the member state where the securities are intended to be offered to the public for the first time or where the first application for admission to trading on a regulated market is made.

The prospectus has to be made available to the public by the issuer, offeror or person asking for admission to trading on a regulated market in advance of, and at the latest at the beginning of the offer to the public or the admission to trading of the securities concerned. The prospectus is regarded as public if it is published in electronic format or on certain web pages.

The approving authority will then notify the competent authorities of the EU member states in which the securities will be distributed.

7. The rules for advertisements

Any advertisement regarding either an offer of securities to the public or an admission to trading on a regulated market must be clearly recognisable as such. All information disclosed in the context of an advertisement must be consistent with the information contained in the prospectus.

8. When are updates required?

Every significant new factor, material mistake or material inaccuracy relating to information included in the prospectus which may affect the assessment of securities and which arises between the time of the approval of the prospectus and the closing of the offer period or when trading on the regulated market begins, must be mentioned in a supplement to the prospectus and must be approved by the competent authority. In such cases, investors who have already agreed to purchase or subscribe to the securities have two days in which to withdraw their acceptance.

9. When will the PR enter into force?

The PR will enter into force on 20 July 2017. There will be a transitional period until 21 July 2019 for most requirements under the PR. Certain provisions will already apply as of 21 July 2018 and 20 July 2017 respectively, such as the exemption from publishing a prospectus for shares which represent less than 20% of the number of shares of the same class admitted to trading on the same regulated market over a period of 12 months.

Please contact us for your free consultation:

Martin Liebi
Tel: +41 58 792 2886

Michael Taschner
Senior Manager
Legal FS Regulatory & Compliance Services
+41 58 792 23 25

Anne Batliner
Legal FS Regulatory & Compliance Service
+41 58 792 2955

“Royalty Restrictions“ in Germany

11 July 2017

Germany has recently introduced new rules that will restrict the tax deductibility of related-party cross-border royalty payments if these payments are benefiting from a low taxation triggered by a harmful preferential tax regime in the country of the recipient.

Based on these new rules, such royalty expenses incurred after 31 December 2017 will no longer be fully deductible in Germany if the relevant income is subject to an effective tax rate of less than 25%:

In detail

For example, if the royalty income is subject to a preferential 10% effective tax rate, 60% of the royalty payments would not be deductible at the German taxpayer level.

However, if a recipient of cross-border royalty payments is subject to the regular tax rate (i.e. no preferential tax regime applies), the royalty restriction rule is not applicable, even if the effective tax rate is less than 25%.

Furthermore, patent box regimes which comply with the OECD “nexus” approach (i.e. under foreign law the preferential tax rate is only granted following an OECD-compliant “nexus” approach) are exempt from the new rule. A patent box of this kind is likely to be introduced in Switzerland in the context of tax package 17 (former corporate tax reform III).

It should however be noted that tax package 17 and therefore an
OECD-compliant Swiss patent box will probably not be introduced before 2020. Consequently, German royalty payments incurred between 1 January 2018 and the introduction of such a patent box in Switzerland could be subject to the new German royalty restriction rule if such royalties benefit from a Swiss preferential tax regime. The following regimes in Switzerland should be investigated in particular to establish whether or not they qualify as harmful preferential tax regimes:

  • Nidwalden IP Box
  • Mixed companies
  • Holding companies
  • Principal companies

An investigation into the impact of the new German limitation rules is recommended in order to determine their impact and to decide whether restructuring should be conducted before 1 January 2018.

In summary, there is still some uncertainty about how the new rules will be interpreted and applied. However, for now it can be assumed that all Swiss preferential regimes may potentially cause issues under the German royalty restriction rule.

There are, however, certain planning ideas which can help mitigate and/or reduce such issues. These solutions may depend on the very specific circumstances of your group and we advise you to have them analysed by your PwC tax consultant on a case-by-case basis.

For a more detailed discussion of how this might affect your business, please contact:

Armin Marti
Partner, Leader Corporate Tax
Tel. +41 58 792 43 43

Stefan Schmid
Partner, Tax & Legal
+41 58 792 44 82

Roman Brunner
Partner, Tax & Legal
+41 58 792 72 66

Urs Brügger
Partner, Tax & Legal
+41 58 792 45 10

Reto Inauen
Senior Manager, Tax & Legal
+41 58 792 42 16

EUDTG Newsletter May – June 2017

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various challenges.

The following topics are covered in this issue of EU Tax News:

CJEU Cases

  • Belgium: CJEU judgment in X concerning the Belgian fairness tax
  • Belgium: CJEU judgment in Van der Weegen and Pot concerning the tax exemption applicable to income from savings deposits
  • France: CJEU judgment in AFEP concerning the French contribution tax
  • Luxembourg: CJEU judgment in Berlioz concerning exchange of information upon request

National Developments

  • Austria: Administrative High Court disallows import of foreign (final) losses despite transfer of place of management
  • Germany: Federal Fiscal Court refers §6a RETT Act to CJEU as potential State aid
  • Germany: Federal Fiscal Court denies deduction of final losses according to EU law
  • Italy: Amendments to the NID and Patent Box Regime: conversion into law with revisions
  • Poland: Ministry of Finance publishes warning on aggressive tax planning structures
  • Spain: Supreme Court issues preliminary ruling about tax on activities that affect the environment
  • Switzerland: Federal Council presents basic parameters of the renewed planned tax reform
  • United Kingdom: Upper Tribunal Tax and Chancery decision on the Coal Staff Superannuation Scheme Trustees

EU Developments

  • EU: ATAD II Directive formally adopted
  • EU: European Commission proposes mandatory disclosure rules for intermediaries
  • EU: ECOFIN Council of 23 May 2017: agreement on Double taxation dispute resolution mechanism in the EU
  • EU: ECOFIN Council of 16 June 2017: Main results
  • EU: European Parliament PANA Committee issues draft report and draft recommendations
  • EU: Public CBCR: European Parliament ECON and JURI Committees adopt joint report
  • Italy: EU Tax Commissioner Moscovici concludes that Italian flat tax for high net worth individuals does not appear to constitute harmful tax competition
  • Spain: European Commission starts infringement procedure on state liability for breach of EU law

Fiscal State aid

  • EU: European Commission and China start dialogue on State aid control
  • EU: European Commission adopts annual Competition Policy Report for 2016
  • Hungary: Advertisement Tax Act aligned to comply with EU State aid rules
  • Spain: CJEU judgment on tax exemptions for Catholic Church
  • United Kingdom: CJEU judgment on the Gibraltar Betting and Gaming Association


Read the full newsletter


This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Further information about our service offerings in EU taxes:


Armin Marti
Partner Tax & Legal Services, Leader Corporate Tax Services
+41 58 792 43 43

Anna-Maria Widrig Giallouraki
Senior Tax Manager
+41 58 792 42 87

EU conflict minerals legislation

EU conflict minerals legislation will enter into force on 7 July 2017 and affect all EU importers of gold, tin, tungsten and tantalum (metals and ores).

The new EU conflict minerals regulation (“CMR”) was officially published on 9 May 2017 and will enter into force on 7 July 2017. The CMR introduces new compliance rules for EU importers of gold, tin, tungsten and tantalum, as well as their ores (“metals and minerals”), which stem from conflict-affected and high-risk areas, among others. The CMR is based on the OECD Due Diligence Guidance for responsible supply chains of minerals from conflict-affected and high-risk areas (“OECD Due Diligence Guidance”), including the annexes and supplements thereto. The USA have already introduced their version of a conflict minerals regulation in Section 1502 of the Dodd-Frank Act. This memorandum provides an overview of the key features of the CRM.


The EU Conflicts Minerals Regulation covers gold, tin, tungsten and tantalum, as well as their ores, which stem from conflict-affected or high-risk areas, among others. The CMR will affect all EU importers (or third parties acting on their behalf) of gold, tin, tungsten and tantalum, and those involved in the EU supply chain of the import of these metals and minerals. EU importers or third parties acting on their behalf must comply with the following key obligations: the creation of management and risk management systems, third party audits, disclosure obligations and ex-post checks. Non-EU importers must ensure that EU importers can fulfil their obligations by providing the required information and data for supply chain traceability. The CMR will enter into force on 7 July 2017. Its key obligations will however only come into effect on 1 January 2021.

Who is affected?

The obligations of the CMR will mainly affect EU importers of metals and minerals. An “EU Importer” is any natural or legal person declaring metals or minerals for release for free circulation, or any natural or legal person on whose behalf such declaration is made. Non-EU goods intended to be put on the EU market or intended for private use or consumption within the customs territory of the EU shall be placed under release for free circulation. Release for free circulation entails:

  1. the collection of any import duties due
  2. the collection, as appropriate, of other charges, as provided for under relevant and effective provisions relating to the collection of such charges
  3. the application of commercial policy measures and prohibitions and restrictions insofar as they do not have to be applied at an earlier stage
  4. the completion of other formalities established in respect of the import of goods.

Release for free circulation shall confer the customs status of EU goods on non-EU goods.

It is important to note, however, that EU importers sourcing metals and minerals not stemming from areas deemed to be “conflict-affected or high-risk” must maintain their responsibility to comply with the due diligence obligations of the CMR. In other words, all EU importer of metals and minerals must comply with the requirements of the CMR. Commodities traders who are not EU importers of metals and minerals are still affected by the CMR because they are part of the supply chain. These traders must ensure that EU importers can fulfil their traceability obligations and other duties under the CMR.

Which metals and minerals are affected?

The CMR impacts gold, tin, tungsten and tantalum and their ores (“metals and minerals”) if they exceed a certain threshold volume. EU authorities have outlined the affected metals and minerals in their “Combined Customs Nomenclature”. Please find below an indicative table of the affected CN codes and exempted volumes.

Affected minerals

Description EU CN code TARIC subdivision Exempted threshold volume (kg)
Tin ores and concentrates 2609 00 00 5,000
Tungsten ores and concentrates 2611 00 00 250,000
Tantalum or niobium ores and concentrates ex 2615 90 00 10 To be communicated
Gold ores and concentrates ex 2616 90 00 10 To be communicated
Gold, unwrought or in semi-manufactured form, or as a powder with a gold concentration lower than 99.5% that has not passed the refining stage ex 7108 100

Affected metals

Description CN code TARIC subdivision Threshold volume (kg)
Tungsten oxides and hydroxides 2825 90 40 100,000
Tin oxides and hydroxides ex 2825 90 85 10 To be communicated
Tin chlorides 2827 39 10 10,000
Tungstates 2841 80 00 100,000
Tantalates ex 2841 90 85 30 To be communicated
Carbides of tungsten 2849 90 30 10,000
Carbides of tantalum ex 2849 90 50 10 To be communicated
Gold, unwrought or in semi-manufactured form, or as a powder with a gold concentration of 99.5% or higher that has passed the refining stage ex 7108 100
Ferrotungsten and ferro-silico-tungsten 7202 80 00 25,000
Tin, unwrought 8001 100,000
Tin bars, rods, profiles and wires 8003 00 00 1,400
Tin, other articles 8007 00 2,100
Tungsten, powders 8101 10 00 2,500
Tungsten, unwrought, including bars and rods obtained by simple sintering 8101 94 00 500
Tungsten wire 8101 96 00 250
Tungsten bars and rods, other than those obtained by simple sintering, profiles, plates, sheets, strips and foil, and other 8101 99 350
Tantalum, unwrought including bars and rods, obtained by simple sintering; powders 8103 20 00 2,500
Tantalum bars and rods, other than those obtained by simple sintering, profiles, wire, plates, sheets, strips and foil, and other

 Which jurisdictions are concerned?

The CMR will affect all metals and minerals coming from areas in a state of armed conflict or fragile post conflict, as well as those areas witnessing weak or non-existent governance and security (such as failed states) and widespread and systematic violations of international law, including human rights abuses. It will be left to the discretion of the respective EU importer whether areas should be deemed “conflict-affected” or “high-risk”. An indicative, non-exhaustive, regularly updated list of conflict-affected and high-risk areas will be provided. This list will however not provide absolute clarity on the countries that are considered “conflict-affected” or “high-risk”. The authorities will prepare non-binding guidelines in the form of a handbook for economic operators, explaining how best to apply the criteria for the identification of conflict-affected and high-risk areas.

What are the obligations under the EU conflict minerals regulation?

EU importers of metals and minerals must comply with the supply chain due diligence obligations set out in the CMR, and keep documentation demonstrating their compliance with these obligations, including the results of independent third-party audits. The key obligations are the implementation of:

  1. Management system: A supply-chain policy for metals and minerals stemming from conflict-affected and high-risk areas must be created, adopted and overseen by senior management, and communicated to suppliers. A grievance mechanism as an early-warning risk-awareness system must also be implemented. A chain-of-custody or supply-chain traceability system must be developed that provides the following (and its respective documentation):
      • description of the metal or mineral, including its trade name and type
      • name and address of the supplier to the EU importer
      • name and address of the smelters and refiners in the supply chain of the EU importer
      • in the case of metals – records of the third-party audit reports of smelters and refiners, if available, or evidence of conformity with a supply chain due diligence scheme recognised by the European Commission
      • in the case of minerals only – the country of origin of the minerals and if available, the quantities and dates of extraction, expressed in volume or weight
      • in the case of metals or minerals originating from conflict-affected and high-risk areas – additional information in accordance with the specific recommendations for upstream economic operators, as outlined in the OECD Due Diligence Guidance.


  2. Risk management obligations: Identify and assess the risks of adverse impacts in the mineral supply chain on the basis of information provided on the standards of their supply chain policy. Implement a strategy to respond to identified risks, one that prevents or mitigates adverse impacts by:
    • reporting findings of the supply chain risk assessment to senior management
    • adopting risk management measures consistent with the OECD Due Diligence Guidance
    • implementing a risk management plan and tracking its performance
    • undertaking additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances.


  3. Third party audit obligations: EU importers of metals or minerals shall have audits performed by an independent third party (‘third-party audit’). EU importers of metals shall be exempt from the obligation to carry out third-party audits provided they provide substantive evidence, including third-party audit reports, which demonstrate that all smelters and refiners in their supply chain comply with the CMR or that they source exclusively from smelters and refiners found on the “Globally-Responsible Smelters and Refiners” list (see below, “Acknowledged refiners and smelters”).
  4. Disclosure obligations: EU importers of metals and minerals shall provide reports of any third-party audits to the competent authorities, and provide their immediate downstream purchasers all information gained and maintained pursuant to their supply chain due diligence with regard to business confidentiality and other competitive concerns. Each year, they shall report as thoroughly as possible on their supply chain due diligence policies and practices for responsible sourcing, including on the Internet.
  5. Ex-post checks: The competent authorities will carry out appropriate ex-post checks in order to ensure that EU importers of metals and minerals comply with the established obligations. This includes the examination of the EU importer’s implementation of supply chain due diligence obligations, the examination of documentation and records demonstrating proper compliance and the verification of audit obligations. Ex-post checks will include on-the-spot inspections, such as those done on the premises of the EU importer.

What are the applicable exemptions?

There are multiple applicable exemptions, such as:

  1. Recycled metals: Where an EU importer can reasonably conclude that metals are derived only from recycled or scrap sources, and when it has, with due regard for business confidentiality and other competitive concerns, publicly disclosed its conclusion and described in reasonable detail the supply chain due diligence measures it exercised in reaching that conclusion.
  2. Stocks of affected minerals: When stocks were created in their current form on a verifiable date prior to 1 February 2013.
  3. Recognised due diligence schemes of industry associations and groups: Industry associations and groups may request recognition of their due diligence schemes from the European Commission.
  4. Acknowledged refiners and smelters: A list will be provided that contains the names and addresses of globally-responsible smelters and refiners.

When will the EU conflict minerals regulation and its obligations take effect?

The CMR will take effect on 9 July 2017. Its key provisions will however only enter into force on 1 January 2021. These key provisions are:

  • Compliance with supply chain obligations
  • Management systems obligations
  • Risk management obligations
  • Third-party audit obligations
  • Disclosure obligations
  • Ex-post checks on EU importers

What will be the impact?

The experience obtained from the enforcement of the conflict minerals regulations under Dodd-Frank has shown that it will take a considerable amount of time to plan, structure and implement the requirements set forth in the OECD Due Diligence Guidance. These requirements will affect corporate governance, risk management, supply chain and trading activities.

Please contact our experts on this topic for a free consultation.


Martin Liebi
Director – Head of Commodities Trading Regulation
Tel: +41 58 792 2886

Guenther Dobrauz
Partner Tax and Legals
Tel: +41 58 792 1497

Newsflash MiFID II

Commodities trading: ESMA has issued comprehensive data determining the EU overall commodities derivatives turnover that help commodities traders to assess whether their trading activities in commodity derivatives can be considered as ancillary to their main business under MiFID II.

Commodities traders trading in commodities derivatives either listed on an EU domiciled trading venue or OTC with a counterparty domiciled in the EU will have to apply for a license under the MiFID II regime that will enter into force on the 3rd of January 2018, unless an exemption applies. One key exemption applicable to commodities traders is the so called “ancillary activity exemption”. The “ancillary activity exemption” comprises a series of tests and compares in particular the proprietary speculative trading activities in commodities derivatives of a commodity trader to the EU overall market trading activity in certain commodities derivatives categories. The EU overall market trading activities in commodities derivatives either being traded on an EU domiciled trading venue or OTC with a counterparty domiciled in the EU have so far not been easy to determine due to missing public data. ESMA has now published EU overall market trading turnover data in the MiFID II-affected commodities derivatives categories.

Commodities traders should now – if they have not already done so – start to evaluate whether they can take advantage from the ancillary activity exemption and how to comply with the rest of MiFID II.

We had the great fortune to be able to assist many commodities traders in their MIFID II implementation and would be delighted to assist also you.

Please call for your free consultation.


Martin Liebi
Head Commodities Trading Regulation
Tel. +41 76 341 65 43

Mandatory disclosure rules for intermediaries proposed by the European Commission

On 21 June 2017, the European Commission (EC) adopted a proposal for a Council Directive on the mandatory automatic exchange of information in the field of taxation in relation to so called “reportable cross-border arrangements”. The proposal accordingly provides for mandatory disclosure of cross-border arrangements by intermediaries or taxpayers to the tax authorities and mandating automatic exchange of this information among Member States. Its stated objective is to enhance transparency, reduce uncertainty over beneficial ownership and dissuade intermediaries from designing, marketing and implementing harmful tax structures.

Mandatory disclosure for cross-border arrangements

The proposal applies to cross-border arrangements, i.e. an arrangement or series of arrangements in either more than one Member State or a Member State and a third country.

Such arrangements become reportable by intermediaries (or in certain cases by the taxpayers themselves), if they bear at least one of certain generic or specific features (called “hallmarks” and including but not limited to the conversion of income into lower-taxed revenue streams, deductible cross-border payments between related parties where the recipient is resident in a zero or low tax jurisdiction, situations where the intermediary is entitled to receive a fee fixed by reference to e.g. the amount of tax advantage derived, the use of jurisdictions with weak regimes of enforcement of anti-money laundering legislation for identifying the beneficial ownership of legal entities et al).

An intermediary is any person being responsible vis-à-vis the taxpayer for designing, marketing, organising or managing the implementation of the tax aspects of a cross-border arrangement. An intermediary may also be a person who directly or indirectly provides material aid or advice with respect to any of the above activities. Intermediaries are covered by this proposal if incorporated/governed by the laws/resident/registered in an EU Member State.

Next steps

Timing-wise, Member States will need to take the necessary measures to require intermediaries and taxpayers to file information on reportable cross-border transactions that were implemented between the date of the formal adoption of the proposal by the Council and 31 December 2018. The provisions of the proposed measure are set to apply as per 1 January 2019 with the first information being disclosed by the end of the first quarter of 2019 (being 31 March 2019).

The Commission’s proposal will now be sent to the Council and the European Parliament. The Directive needs to be formally adopted by the Council by unanimous vote, after consultation of the European Parliament.

For more detailed information, please refer to the PwC Newsalert from our EUDTG network.

EMEA ITS Permanent Establishment Webcast Series, Episode One

The Changing PE Threshold

Thursday, 8 June 2017, 3.00 – 3.45 pm CET

Preventing the artificial avoidance of Permanent Establishment (“PE”) status is one of the key topics addressed by the OECD’s Base Erosion and Profit Shifting (“BEPS”) package.

In this webcast series PwC specialists will address the practical implications that a reduction in the PE threshold will have for multinational corporations and will provide an insight, through examples, on the challenges and practical actions that can be taken to manage PE in the post-BEPS world.

The webcast series will provide a mix of technical updates and analysis, practical experience and local country expertise around topics such as profit attribution to a PE, direct tax consequences of a PE and the broader impact that the new rules will have on an increasingly global and mobile workforce. Critically, it will give you the chance to raise questions directly to our PE specialists.

The webcast series will start by setting the scene for the current PE landscape by considering the practical changes that have taken place to the PE threshold and the subsequently looking at the practical challenges associated with attributing profit to PE’s. The later sessions will focus on the practical implications of
these changes, providing guidance and experience of the challenges and risks that may be created.

  • Session 1 –The Changing PE Threshold – 8 June 2017
  • Session 2 –Profit Attribution to PE’s – 6 July 2017

After the summer break we will return recharged with further sessions covering topics such as

  • Broader implications of a PE beyond corporate tax
  • VAT and PE
  • Employee mobility and PE consequences

Episode 1, The Changing PE Threshold – 8 June 2017

This introductory episode will set the stage for our ongoing discussion of PE in the new tax environment and will work through practical examples being faced by multinational corporations, addressing questions such as:

  • What are the main developments in the definition of PE in the international environment?
  • Walk though practical examples to demonstrate how the changes related to: (1) fixed place of business, (2) auxiliary and preparatory exceptions, (3) independent and dependent agent, (4) antifragmentation and contract splitting are likely to work in practice and potential risk areas.
  • Assess how PE definition and interpretation may vary by local jurisdiction, taking Poland and Spain as examples to identify the impact this will have on a multinational’s approach to international business.
  • Provide an update on the multilateral instrument as it relates to PE.

Speakers for episode 1 are:

Monica Cohen-Dumani – EMEA ITS Leader
Guillaume Glon – PwC France
Mike Cooper – PwC UK
Agata Oktawiec – PwC Poland
Carlos Concha Carballido – PwC Spain
Please click on the below link to register for the WebEx session.

Registration Link

Complete the required registration fields and select “Submit”.
Once you have registered, you will receive the WebEx access details. The WebEx will be recorded and you will receive a link to the recording via e-mail after the event using the same details. There will be time for questions and answers with your speakers during the WebEx. Questions can also be sent in advance of the
WebEx session to the following email address:

We do hope that you will join us online!

Best regards
Monica Cohen-Dumani

PwC | Partner, International tax services, EMEA ITS Leader
Office: +41 58 792 9718 | Mobile: +41 79 652 14 77
PricewaterhouseCoopers SA
Avenue Giuseppe-Motta 50 | Case postale | CH-1211 Genève 2, Switzerland

EU: Anti-Tax Avoidance Directive II (“ATAD II”) formally adopted

On 29 May 2017 the Council Directive amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries (“ATAD II”) was formally adopted by the EU Council. Political agreement on this Directive had already been achieved at ECOFIN level on 21 February 2017.

The amended Directive (ATAD II) has a broader scope than ATAD I (adopted in 2016 and effective as of 2019) as it also covers hybrid mismatches with third countries and extends the hybrid mismatch definition to cover more categories of mismatches (e.g. to include arrangements involving PEs, hybrid transfers, imported mismatches, reverse hybrid entities and rules on tax residency mismatches). The terms and concepts contained in ATAD II are very similar to those in the OECD’s BEPS Action 2 recommendation as it currently stands.

The EU Member States will need to transpose the provisions of ATAD II by 31 December 2019 into their national laws and apply them per 1 January 2020. Only exception is the reverse hybrid entity rule for which the EU Member States will need to transpose by 31 December 2021 and apply per 1 January 2022. Nevertheless, payments to reverse hybrids will no longer be deductible from 1 January 2020.

We strongly recommend multinationals with Swiss & EU operations to review their structures to consider whether any of the new rules applies. In particular also Swiss entities benefiting from e.g. the Swiss finance branch and the Swiss principal taxation rules (to the extent still applicable in 2020 depending on timing and outcome of the Swiss Corporate Tax Reform 17 project) should review a potential impact by these rules on a case by case basis.

For more information please find below the newsletter from our EUDTG Network:



Armin Marti
Partner Tax & Legal Services, Leader Corporate Tax Services
+41 58 792 43 43

Anna-Maria Widrig Giallouraki
Senior Tax Manager
+41 58 792 42 87

The countdown is on: one year to get ready for the EU General Data Protection Regulation GDPR

On 25 May 2016 the EU General Data Protection Regulation (GDPR) entered into force. After the elapse of the 2-year transposition period, it will become directly applicable on 25 May 2018.

The new EU data protection legislation introduces substantial changes for companies dealing with personal data: As a selection, the new requirements on transparency, on proportionality as well as on documentation when processing personal data are among the key changes. These are significant challenges for companies. In addition, the new legislation substantially improves the rights of the concerned individuals – the data subjects. Thanks to the GDPR, they now have clear-cut rights with regard to companies processing their data. Inter alia the key rights include the right on information, on rectification and deletion of personal data, on restriction of processing, on portability as well as the right to object processing. As data controllers, companies have to be able to comply with all these rights.

Besides new duties and compliance obligations for companies, data protection authorities are given new competences and enforcement instruments. Standing out are the new sanctions of up to the amount of EUR 20m or 4% of the international annual turnover of the concerned company, whichever is higher.


Swiss companies that (e.g. because they do business in the EU) are subject to the GDPR now have one year to make the necessary adaptions to comply with the GDPR. The new requirements are to be analyzed, gaps to be identified and mitigation actions to be planned and implemented. It is important to be prepared.


Susanne Hofmann
Legal Compliance Leader
+41 58 792 17 12

Michael Adrian Meyer
Legal Services – Senior Manager
+41 58 792 51 31

Reto Häni
Partner and Leader Cybersecurity
+41 58 792 75 12

Idir Laurent Khiar
Legal Services – Assistant Manager
+41 58 792 17 51