Switzerland has recently announced the introduction of new regulations to strengthen its efforts against money laundering. The draft rules, proposed by the Swiss government, aim to address perceived gaps in the existing regulations by holding lawyers and consultants responsible for reporting risks and increasing supervision of legal entities, including trusts.
These proposed rules will undergo a consultation process and are expected to be presented to the Swiss parliament in 2024.
As the world’s largest manager of offshore wealth due to its renowned banking sector, Switzerland has been striving to shed its previous reputation as a haven for illicit funds. The country has already been actively sharing bank account information with over 100 nations.
However, there has been mounting international pressure on Switzerland to enhance transparency regarding corporate ownership, especially since many companies and entities, such as trusts, often conceal the true identities of beneficial owners.
If the new regulations are approved, lawyers, accountants, and other consultants involved in the establishment of trusts, holding companies, or real estate deals would be subjected to due diligence requirements and reporting obligations.
In addition, the government intends to establish a central registry to track the actual owners of legal entities as a measure to combat money laundering through shell firms. This proposal was initially introduced in October last year.
The registry would be managed by the Federal Department of Justice and Police, providing comprehensive details on the beneficial owners of companies and other legal entities. A dedicated body within the finance ministry would be responsible for verifying the registry, and if necessary, imposing sanctions.
The proposed rules would also impose stricter obligations on banks, companies, and service providers to scrutinize and manage the risks associated with potential violations of sanctions. This issue has gained significant international attention, particularly following Russia’s invasion of Ukraine.
Under the new regulations, all future real estate transactions would be subjected to thorough due diligence procedures. Additionally, cash payments for high-value precious metals and gemstones, such as gold and diamonds, would be subject to money laundering checks for amounts exceeding 15,000 Swiss francs ($17,055.14), a reduction from the current threshold of 100,000 francs.
($1 = 0.8795 Swiss francs)