Switzerland Introduces New Regulations To Clamp Down on Money Laundering

Switzerland proposed new Anti-Money Laundering (AML) regulations to crack down on money laundering and protect the country’s reputation from financial criminals.  

According to the new framework, the extra documentation and due diligence obligations on legal professionals, auditors, and other advisors involved in creating trusts, controlling corporations, or overseeing real estate deals. These new AML regulations are scheduled to be previewed in the parliament in 2024. After the conultations in the parliament, the Swiss government will implement these regulations.

Switzerland’s Finance Minister, Karin Keller-Sutter, disclosed these reforms of AML measures to combat money laundering and enhance transparency by closing loopholes in the identity verification system and requiring companies to reveal “ultimate beneficial owners” to build trust. These regulations aim to improve AML measures, make lawyers and consultants responsible for reducing risks, and bolster the examination of regulatory laws. At the present time, Switzerland is the only European country that does not have any national registered ownership plan. 

Switzerland’s banks are the world’s largest guardians of offshore wealth, with an estimated amount of $2.4tn of foreign assets. However, they are struggling to overcome its historical reputation as a haven for illegal funds. They have standard security practices to share their banking information with more than a hundred nations. Despite that, international regulation has urged Switzerland to enhance transparency in property ownership and implement vigorous measures to combat financial crimes, alongside the prevention of enabling criminals to illegally disguise the true identity of their business or the property’s ultimate beneficial owner.  

The Finance Minister stated, “A robust system to protect against financial crime is essential to the reputation and lasting success of an internationally significant, secure, and forward-looking financial center. Money laundering harms the economy and jeopardises confidence in the financial system.”

This is the second time Switzerland authorities have updated their AML laws and regulatory obligations in three years. The new beneficial ownership database has not been made accessible to the local public, but the Government, corporate, and banking sectors can use it for due diligence.  

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