Federal Law of October 5, 1990, on Financial Aid and Compensation (LSu) - Purpose (SUG)

This law subjects the granting of financial aid (aid) or compensation by the Confederation, throughout its domain of competence, to the following conditions: a. the aid or compensation is sufficiently justified; b. the objective for which it is intended will be achieved in an economical and efficient manner; c. they are allocated according to uniform and equitable principles; d. they are determined in accordance with the imperatives of financial policy; e. ...

This law defines the applicable principles in terms of legislation and establishes the general provisions governing the various regimes of aid and compensation.

This law applies to all financial aid (assistance) and compensation provided for under federal law.

Chapter 3 is applicable unless otherwise specified by other laws or federal ordinances of general scope.

Chapter 3 applies by analogy to aid and compensation that are not granted in the form of non-repayable cash benefits, insofar as this is compatible with the purpose of the benefits.

However, Chapter 3 does not apply: a. to benefits provided to foreign states or to recipients of financial aid or other support measures referred to in Art. 19 of the June 22, 2007, Act on the Host State, with the exception of international non-governmental organizations. b. to benefits provided to institutions headquartered abroad.

Financial aid (aid) refers to the benefits convertible into money granted to recipients outside the federal administration with the purpose of ensuring or promoting the achievement of a task that the beneficiary has decided to undertake. The monetizable benefits may notably take the following forms: non-repayable monetary allowances, preferential conditions granted during loans, guarantees, as well as in-kind benefits and services provided free of charge or under advantageous conditions.

Compensation refers to the benefits awarded to recipients outside the federal administration aimed at mitigating or compensating for the financial burdens arising from the execution of: a. tasks prescribed by federal law; b. public law tasks delegated by the Confederation.

The Federal Council and the administration shall comply, in the drafting, enactment, and revision of normative acts governing financial aid and compensation, with the principles defined in this chapter.

The Federal Council shall periodically review, at least every six years, whether the normative acts governing assistance and compensation comply with the principles of this chapter.

The Federal Council reports to the Federal Assembly on the findings of these reviews, particularly: a. in the messages through which it proposes: 1. the adoption of commitment credits or expenditure ceilings, 2. the modification of provisions related to subsidies; b. in the message concerning the State account.

The Federal Council shall propose to the Federal Assembly the necessary legal amendments and ensure that its ordinances are adapted accordingly.

Legal provisions for granting aid may be enacted when: a. the task serves the interest of the Confederation; b. according to the criteria of a fair distribution of tasks and burdens between the Confederation and the cantons, the cantons should not discharge or promote the task alone; c. the task cannot be duly accomplished without financial assistance from the Confederation; d. the self-financing efforts that can be expected from the applicant have been made, and all other financing options have been exhausted; e. the task cannot be accomplished in a simpler, more effective, or more rational manner.

The legal provisions governing aids must stipulate that: a. the task can be completed at the lowest cost and with the minimum administrative formalities; b. the amount of the aid depends on the interest of the Confederation as well as on the interest of the beneficiaries in its implementation; c. the beneficiary is required to contribute with a provision of their own that corresponds to their economic capacity; d. the beneficiary fully utilizes their own resources and other available sources of financing; e. aids are determined globally or on a lump-sum basis, insofar as this method of calculation allows the achievement of the intended goal and ensures the economical completion of the task; f. start-up, restructuring, or bridging aids, limited in time, are provided as much as possible; g. tax reliefs as a form of aid are generally eschewed; h. financial policy imperatives can be taken into consideration as much as possible, notably by making the granting of aids dependent on the availability of credits and by setting ceiling rates; i. financial aids to the cantons can be granted within the framework of program agreements and be determined on a global or lump-sum basis.

Cantons that supplement the Confederation's benefits generally participate in the execution. Applications are submitted, and financial aid is distributed through their intermediary. The activities of the concerned authorities are coordinated to avoid multiple administrative procedures.

Legal provisions providing for compensation may be enacted when: a. the person responsible for the task does not have a predominant personal interest in carrying out the task; b. it cannot be expected of those tasked with the responsibility to bear the financial burden themselves; and c. the benefits derived from accomplishing the task do not offset the financial burdens.

Legal provisions providing for compensation for the cantons or their public law local authorities may be enacted when: a. federal law governing the delegation of tasks is not limited to a mere framework legislation; b. the cantons are required to carry out tasks that go beyond simple administrative execution of federal provisions; c. the cost of performing the tasks cannot be substantially charged to the beneficiaries or those who necessitated the measure; d. Compensation must be paid within the framework of program agreements between the Confederation and the cantons.

The legal provisions governing compensation must stipulate that: a. the task can be completed at the lowest cost and with the minimum of administrative formalities; b. the amount of the compensation depends on the interest of those responsible for the task and the benefits inherent in its accomplishment; c. compensation is set globally or on a lump-sum basis, insofar as this calculation method allows for achieving the intended objective and ensuring the economic completion of the task; d. financial policy imperatives can be considered as much as possible, notably by subordinating the granting of benefits to the available credit volume and setting ceiling rates; e. provisions must cover: 1. a transparent, objective, and impartial selection procedure to be applied when multiple potential beneficiaries are candidates for the delegation of a public law task within the meaning of art. 3, para. 2, letter b, 2. the legal form of the delegation, the conditions applicable to the delegation, and the legal remedies; if the legal remedies are not stipulated, art. 35, para. 1, applies, 3. the consequences of non-accomplishment or defective accomplishment of the task, 4. the consequences of the decommissioning or alienation of assets for which compensation is paid for a specific use.

When drafting legal provisions providing compensation for the cantons or their public law local authorities, it is also necessary to ensure: a. the margin of maneuver of the canton in terms of development and decision-making, and the possibility for beneficiaries and those who made the measure necessary to contribute to the costs, is considered in the calculation of compensation; b. generally, the granting of compensation within the framework of a program agreement is provided for and this compensation is set globally or on a lump-sum basis; c. the indemnity is paid to the canton, even when the canton assigns the task to third parties.

When the benefits required for a project meet the conditions of several regulatory acts, the overall expense is distributed according to the interests involved. The aid and compensation are allocated proportionally. If this is not possible or appropriate, the benefit is allocated under the regulatory act that best corresponds to the task to be subsidized.

If multiple authorities grant benefits for the same project, the coordination of the procedure generally falls to the authority that is likely to be called upon to allocate the highest amount of aid or compensation. This authority shall ensure, in particular, compliance with the provisions of paragraph 1.

Anyone who, for one and the same project, requests benefits provided by several regulatory acts must inform the relevant authorities. If they fail to do so, any aids or compensations improperly received may be reclaimed.

This article applies in all cases where, under special legislation, financial aid and compensation are granted only within the limits of the allocated credits, or where the applicant cannot claim any right to aid.

If the submitted or foreseeable requests exceed the available resources, the competent departments shall establish a priority order for the assessment of applications. The Federal Council may decide that certain priority orders will be subject to its approval.

The cantons shall be consulted before establishing the order of priority, particularly with respect to aid or compensation for which they are the sole beneficiaries or for which they provide supplementary benefits.

The orders of priority shall be communicated to the interested parties.

The competent authority shall reject by decision those applications for financial aid that cannot be accepted within a reasonable time due to the order of priority.

Applications for compensation that cannot yet be accepted due to the order of priority shall nonetheless be carefully examined by the competent authority. If the necessary conditions are met, the competent authority shall provide a provisional benefit; it shall also set the necessary deadline for the final decision.

Only expenses that have been actually incurred are taken into account, provided that they were absolutely necessary for the proper fulfillment of the task.

Capital interest is not taken into account when benefits are allocated for constructions.

Regarding aid and compensation intended to cover deficits, the calculation of the determining financial results of the enterprise is subject to the following rules: a. depreciation is only considered insofar as it does not exceed the usual rates in the industry; b. depreciation on investments that have been partially financed by non-repayable aid or compensation is only taken into account for the part that exceeds these benefits.

The competent authority may not exceed the ceiling set by decision or under a contract (Art. 17, para. 1, second sentence, and Art. 20, para. 1) unless the additional costs are attributable to authorized modifications of the project, actual inflation, or other unavoidable factors.

Aid is granted only upon request.

Unless otherwise provided by special legislation, the selection procedure applicable when multiple potential beneficiaries are candidates for the delegation of a task by the Confederation, the execution of which entails the granting of compensation, is governed, subject to the provisions below, by the provisions of the Federal Act of June 21, 2019, on Public Procurement applicable to public contracts not subject to international agreements.

Pursuant to Art. 13, para. 1, let. g, of the Act of June 18, 2004, on Official Publications, the opening of the selection procedure is published in the Federal Gazette. The selection procedure concludes with the notification of a decision to all participants in the procedure. Legal remedies are governed by Art. 35, para. 1, of this Act.

The delegation and the compensation granted after the final closure of the selection procedure are governed by Arts. 14 to 40 of this Act.

Any person applying for aid or seeking to be delegated a task from the Confederation is required to provide the competent authority with all necessary information. They must authorize the authority to inspect records and grant access to premises.

The obligations defined in para. 1 persist even after the grant of aid or delegation of a Confederation task, to allow the competent authority to conduct necessary inspections and to resolve cases of restitution.

These obligations also persist after the grant of aid or compensation with respect to third parties, to the extent that the beneficiary engages them to perform the task.

Financial aid and compensation are generally granted by way of a decision.

A public law contract may notably be concluded: a. when the competent authority has a wide margin of discretion; b. when, in the case of financial aid, it is desirable to exclude the possibility of the recipient unilaterally abandoning the fulfillment of their task.

Financial aid and compensation are generally allocated to the cantons on the basis of program agreements.

Benefits intended for a large number of recipients may be granted without a formal decision or contract.

The rejection of an application must be the subject of a decision.

The competent authority shall indicate in its decision the legal basis, as well as the nature and amount of the aid or compensation. If the amount cannot be definitively determined, the authority shall specify, based on the submitted documents, the expenses that may be considered, the percentage of the contribution, and its maximum amount.

In the absence of legal prescriptions on the matter, the authority shall also determine: a. the scheduled term for the disbursement of the aid or compensation, subject to art. 23; b. the duration of the allocation of the assets for which the aid or compensation is granted;

When the authority makes a decision before the recipient has completed their task, it shall additionally set: a. the modalities of the task to be performed; b. the deadline for the completion of the task (start and end); c. all charges required to ensure the best possible use of the provision and the adequate completion of the task on time and at the lowest cost.

If there are indications that lead to the belief that the beneficiary of financial aid acquires goods, services, or construction works whose total cost is financed by more than 50% by financial aids from the Confederation, the authority may compel the beneficiary to ensure fair competition. The beneficiary is generally required to request at least three offers.

If the authority has not determined the final amount of the benefit in the decision granting the right to assistance or compensation, the competent authority shall determine it as soon as it becomes aware of the account statement, without issuing a new decision.

If the decision granting the right to assistance or compensation does not contain all the necessary data for calculating the final amount of the benefit, the authority shall establish in a new decision the missing elements or new elements to consider. The same applies to the granting of assistance or compensation for additional costs provided for in Art. 15.

The validity of the contract is subject to compliance with the written form. Art. 16, para. 3 is reserved.

At the end of the negotiations, the authority sends the applicant a proposal based on Art. 17 or Art. 20 a and sets a deadline for the applicant to accept the contract. If the proposal refers to a program agreement and affects the interests of municipalities, the canton submits it for feedback to the concerned municipalities.

The proposal is notified to the applicant and any third parties entitled to lodge an appeal. These parties, like the applicant, may request a decision subject to appeal within 30 days.

Art. 17 applies to the content of the proposal and the contract.

Art. 18 applies to the subsequent determination of the final amount. Instead of the decision provided for in Art. 18, para. 2, the authority shall make an amendment or supplement to the contract according to the procedure established in Art. 19.

Program agreements set forth the strategic objectives to be achieved jointly and govern the contribution of the Confederation and, in agreement with the Federal Audit Office, the modalities of financial supervision.

Program agreements generally span several years.

If municipalities provide services covered under program agreements, the canton reimburses them for the expenses incurred, at least in proportion to the federal contributions to the total costs.

Art. 23 does not apply to program agreements.

The competent authority issues the guidelines applicable to the preparation of accounting statements. In doing so, it takes into account the practices customary in the sector.

When cantons, under special legislation, themselves allocate aid or compensation subject to federal law, federal authorities may issue guidelines to ensure a uniform practice and equality of treatment in the granting of benefits.

With regard to benefits that are only granted within the limits of the available credits or for which the applicant cannot assert any rights (Art. 13), federal authorities set the financial allocation for each canton after consulting them. The cantons establish the necessary order of priorities.

Financial aid and compensation may be disbursed at the earliest once expenditures become imminent.

Before the final amount of the aid or compensation is determined, up to 80% of the benefit may, in principle, be disbursed.

Upon the expiration of a 60-day period from the payment due date, unpaid aid or compensation amounts shall be increased by an annual default interest rate of 5%.

The competent authority ensures that the beneficiaries fulfill their tasks in accordance with the applicable provisions and the conditions imposed upon them.

To this end, it establishes risk-adjusted monitoring plans.

These plans specify, in particular: a. to what extent it is necessary to conduct random checks or in-depth inspections; b. who is to carry out the monitoring and using which methods; c. how coordination should take place between the monitoring and control activities conducted by other authorities, particularly cantonal ones; d. how the monitoring results are to be documented.

It is possible to waive the obligation to establish a monitoring plan when dealing with services that have minimal financial impact, mandatory contributions to international organizations, or services granted to beneficiaries under extensive federal supervision.

The applicant may not commence construction work or prepare significant acquisitions unless the aid or compensation has been definitively allocated to them by means of a decision or under a contract, has been provisionally granted to them, or the competent authority has authorized them to do so.

The competent authority may authorize the commencement of construction or the preparation of an acquisition if it is not possible to wait for the result of the dossier examination without causing serious inconvenience. This authorization does not confer any right to the aid or compensation.

No benefit is granted for works that have been commenced or acquisitions prepared without authorization. Nevertheless, the competent authority may award a benefit to the applicant in terms of compensation if the circumstances justify it.

Significant modifications or those generating additional costs can only be made to the projects with the consent of the competent authority.

If, despite a formal notice, the beneficiary fails to perform the task incumbent upon them, the competent authority shall not proceed with the disbursement of the aid or shall demand the repayment of that amount, subject to an annual interest rate of 5% from the day of payment.

If, despite a formal notice, the beneficiary performs the task incumbent upon them in a defective manner, the competent authority shall appropriately reduce the financial aid or demand the repayment of a part of that amount, subject to an annual interest rate of 5% from the day of payment.

In cases of excessive hardship, the repayment may be waived in whole or in part.

In the case of contractual aids, the obligation to fulfill the contract is reserved.

When a real estate property (building, construction, or other structure) or movable property for which assistance has been granted is decommissioned or alienated, the competent authority shall demand the restitution of the assistance. The amount to be repaid is determined based on the relationship between, on one hand, the period during which the recipient effectively used the property in accordance with the intended purpose and, on the other hand, the set duration of intended use. The amount to be repaid may be reduced in cases of undue hardship.

In cases of alienation, the authority may partially or entirely waive the restitution of the assistance if the acquirer meets the conditions entitling them to receive it and assumes all the obligations of the recipient.

The recipient shall promptly inform the competent authority in writing of any decommissioning or alienation.

The competent authority shall revoke the decision granting the right to assistance or compensation if the benefit was granted unduly in violation of legal provisions or on the basis of inaccurate or incomplete facts.

The authority shall refrain from revocation if: a. the recipient has taken measures in reliance on the decision that cannot be undone without incurring financial losses that are difficult to bear; b. it appears that it was difficult for the recipient to detect the violation of the law; c. the inaccurate or incomplete presentation of facts is not attributable to the recipient.

Financial assistance may be withdrawn entirely or partially, or a request for partial or full restitution may be made if the recipient uses them in violation of public procurement law provisions.

When revoking the decision, the authority shall demand the restitution of benefits already paid. If the recipient acted intentionally or negligently, the authority shall also charge an annual interest rate of 5% from the date of payment.

Restitutions as provided in Art. 12 of the Federal Act of 22 March 1974 on Administrative Criminal Law are reserved.

Art. 30 applies by analogy to contracts concerning assistance or compensation. Instead of revoking a decision, the competent authority terminates the contract.

Claims related to financial aid or compensation are subject to a statute of limitations of five years.

The right to reimbursement for aid or compensation is subject to a statute of limitations of three years from the day on which the decision-making authority or the authority party to the contract becomes aware of this right, but no later than ten years from the day it arose.

If the beneficiary failed to inform the authority in accordance with Art. 29, para. 3, and if the duration of use of an asset has been set at more than ten years, the statute of limitations equals the duration of use, but is at least ten years from when the right arose.

If the act giving rise to the claim results from a punishable act by the beneficiary, the action is subject to a statute of limitations no earlier than the expiration of the statute of limitations for the criminal action. If the statute of limitations for the criminal action no longer applies because a judgment of first instance has been rendered, the civil action is subject to a statute of limitations no earlier than three years from the notification of the judgment.

Legal remedies are governed by the general provisions of federal procedure.

In cases where the competent authority must rule on a large number of similar requests, the Federal Council may provide that the decisions are subject to objection.

Requests for aid or compensation are assessed: a. in accordance with the law in force at the time of the request, when the benefit is granted before the execution of the task, or b. in accordance with the law in force at the beginning of the execution of the task, when the benefit is granted subsequently.

Articles 14 to 18 of the Federal Act of March 22, 1974, on Administrative Penal Law apply to fraud in matters of benefits and contributions, forgery of documents, fraudulent obtaining of a false determination, suppression of documents, and obstruction of criminal prosecution.

Anyone who, in a procedure relating to assistance or compensation, intentionally provides inaccurate or incomplete information with the intention of obtaining an illegitimate advantage shall be punished with a fine.

The offenses provided for in Art. 37 and 38 shall be prosecuted and adjudicated pursuant to the Federal Law of March 22, 1974, on Administrative Criminal Law by the competent federal office with subject-matter jurisdiction. The Federal Council may designate another administrative unit of the Confederation as competent.

The cantonal bodies and services responsible for the implementation of federal regulatory acts concerning aid and compensation are obliged to inform the competent authority as soon as they become aware of offenses provided for in Art. 37 or Art. 38.

If the applicant or recipient fails to comply with the obligation to provide information as defined in Art. 11, para. 2 and 3, the competent authority may refuse to grant or disburse aid or demand the repayment of benefits already allocated, subject to an annual interest of 5% from the day of payment.

If there are grounds for any of the offenses mentioned in this section, or if the obligation to provide information as defined in Art. 11, para. 3 is not met, the competent authority may temporarily deny aid to the offending natural persons or the legal entities they represent.

The amendments to federal law are listed in the annex, which is an integral part of this law.

Chapter 3 of this Act also applies to decisions made and contracts entered into regarding aid or indemnities under the previous law, insofar as their effects continue beyond the entry into force and this Act is not less favorable to the beneficiaries.

Regulations that do not comply with the provisions of Chapter 3 shall be adapted within two years following the entry into force of this Act, provided they are not based on laws or federal decrees of general scope that differ from it.

This Act is subject to an optional referendum.

The Federal Council shall determine the date of its entry into force.

Date of entry into force: April 1, 1991