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Swiss NCP misses the mark on UBS links to mass surveillance of Uighurs
UBS listed as owner of Hikvision shares it buys for its clients, yet Swiss NCP says no business relationship exists
On January 28th the Swiss National Contact Point (NCP) for the OECD Guidelines accepted the specific instance filed by the Society for Threatened Peoples (STP) against Swiss Bank UBS related to the bank’s business relationship with Hikvision, a company that is aiding China’s mass surveillance and genocide of Uighurs. This is the first OECD NCP complaint to focus on a financial institution’s asset management business and passive products. Up until now, the NCP procedure has focused on asset owners’ direct shareholding or banks’ mainstream lending. In its assessment, the Swiss NCP concluded that “a direct link between UBS’s products and services and the alleged human rights violations could not be excluded”. The Swiss acceptance of the case is significant because it represents the first time an NCP has recognized the responsibility banks have for their passive investments through indexed funds. In recent years, the asset management industry has seen a significant shift towards passive investment strategies, by which funds are typically invested in an index rather than in actively traded shares. Currently, over USD 10 trillion is invested in passively managed funds globally, so the recognition of banks’ responsibility for addressing impacts caused by these investments is important. However, on a second element of the complaint, the Swiss NCP concluded that no business relationship between UBS and Hikvision exists in relation to UBS’s role as custodian for Hikvision…