In a significant move to align with international standards and combat money laundering and terrorist financing, the Swiss government has initiated consultations on proposed reforms to its anti-money laundering (AML) framework. These reforms, unveiled on August 30th and led by the Swiss Federal Council, aim to introduce several critical changes.
Firstly, they seek to enhance transparency by introducing beneficial ownership reporting requirements for companies. Under these reforms, companies would be obligated to report ownership information to a federal registry. The registry, managed by the Federal Department of Justice and Police and audited by the Federal Department of Finance, will not be publicly accessible. Certain entities will have access to simplified reporting procedures to reduce compliance costs.
Secondly, the proposed reforms extend AML due diligence rules to consultancy activities, with a specific focus on legal advice, which is considered to carry a heightened risk of money laundering, particularly in real estate transactions.
Additional changes include reducing the threshold for cash payments in precious metals trading from 100,000 Swiss francs to CHF 15,000 and subjecting all cash payments in real estate to AML due diligence rules, irrespective of their value.
These reforms come in response to Switzerland’s efforts to align with international standards, particularly those set by the Financial Action Task Force (FATF). The Swiss Federal Council believes that increased transparency will enable authorities to swiftly and confidently identify the true beneficiaries behind legal entities.
In light of previous financial scandals, there have been calls for the Swiss Financial Market Supervisory Authority (FINMA) to be granted more robust investigatory and enforcement powers. To address this, FINMA recently issued new guidance aimed at enhancing banks’ money laundering risk analysis following repeated shortcomings identified during supervisory reviews. These proposed reforms signal Switzerland’s commitment to strengthening its AML framework and aligning itself with international expectations. The consultation period for feedback on these reforms is open until November 29th.