On Wednesday, Switzerland announced new draft regulations aimed at reinforcing its anti-money laundering measures, making lawyers and consultants responsible for flagging risks and bolstering scrutiny of legal structures like trusts. Slated for parliamentary review in 2024, after consultations, the draft regulations have been prepared by the Swiss government.
With its banks serving as the world’s largest custodians of offshore wealth, Switzerland has been striving to dispel its historical reputation as a haven for illicit funds. The country currently shares banking information with more than 100 nations as a standard practice.
However, Switzerland has faced global calls to increase transparency surrounding the murky arena of corporate ownership. Here, trusts and companies frequently conceal the true identity of their ultimate beneficiaries.
If approved, the new framework would extend due diligence and reporting obligations to lawyers, accountants, and other advisers involved in establishing trusts, holding companies, or managing property transactions.
Additionally, the government outlined plans for a central registry that would document the genuine owners of legal entities, aimed at combating money laundering through shell companies. This idea was initially proposed last October.
This central registry would be managed by the Federal Department of Justice and Police. It would list the beneficial owners of corporations and other legal entities, with oversight provided by a division within the finance ministry, which would also have the authority to impose sanctions if needed.
The proposed measures would further obligate banks, firms, and service providers to meticulously assess and manage the risks of sanctions violations among their clients—especially pertinent given the global focus following Russia’s invasion of Ukraine.
The draft rules also indicate that all future property transactions would undergo due diligence checks. Moreover, cash transactions for high-value items like gold and diamonds would fall under anti-money laundering checks for amounts exceeding 15,000 Swiss francs ($17,055.14), a significant reduction from the current threshold of 100,000 francs.
August 31, 2023 Published by The Financial Times.