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News

Switzerland drafts tighter rules to combat money laundering

Friday 1 September 2023 09:54 CET | News

Switzerland has drafted new rules to tighten its money laundering regulations, holding lawyers and consultants accountable for reporting risks and improving oversight of legal entities.

Drafted by the Swiss government, the new rules will be presented to parliament in 2024 following consultation. 

Switzerland, known for its banks serving as the primary global hub for offshore wealth management, has made concerted efforts to distance itself from its previous reputation as a place for criminals seeking to conceal unlawfully acquired assets. The country routinely exchanges bank account information with over 100 countries. However, Switzerland has faced increasing international pressure to shed more light on the realm of corporate ownership, where many companies and entities, such as trusts, obscure the identity of real beneficiaries.

If these new rules are accepted, lawyers, accountants, and other company consultants who set up trusts, holding companies, or arrange real estate deals will also become subject to due diligence rules and reporting obligations.

Switzerland has drafted new rules to tighten its money laundering regulations, holding lawyers and consultants accountable for reporting risks and improving oversight of legal entities.

Initially put forward in October 2022, the government also explained its intentions to establish a central registry to track who actually owns legal entities, in a move to fight money laundering via shell companies.

This new register, to be held at the Federal Department of Justice and Police, would detail the beneficial owners of companies and other legal entities, with a body within the finance ministry carrying out checks on the registry and, if necessary, imposing sanctions.

The new rules would also be stricter obligations for banks, firms, and service providers to scrutinise and control risks of sanctions violations amongst their clientele.

Moreover, under the proposed rules, all future real estate deals would also be subject to due diligence scrutiny, while cash payments for precious metals and gemstones, such as gold and diamonds, would be subject to money laundering checks above a value of USD 17,055, reducing from the current threshold of USD 113,352. 

 

Swiss Government to Track Corporate Ownership 

Towards the end of 2022, the cabinet asked the finance ministry to draft specific proposals by mid-2023 that could increase transparency by making it easier to identify corporate owners. This move was aimed at strengthening the prevention and prosecution of financial crime, therefore, safeguarding the integrity and reputation of Switzerland as a financial centre and business location. The main mission was to create a central register for identifying owners and updating information about who the true beneficiaries are. The Swiss government stated that the register should be accessible to relevant authorities, but not to the public. Moreover, the finance ministry was also asked to consider steps to tighten anti-money laundering rules, such as widening their scope to include the legal professions. 

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Keywords: fraud management, fraud detection, money laundering, fraud prevention, financial crime
Categories: Fraud & Financial Crime
Companies:
Countries: Switzerland
This article is part of category

Fraud & Financial Crime

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