Switzerland Proposes Stricter Anti-Money Laundering Regulations, Aims to Enhance Accountability and Transparency in Financial Sector

The Swiss government has proposed new anti-money laundering (AML) regulations that are set to impose stricter standards compared to the rest of Europe. These rules are designed to enhance accountability and oversight for professionals like lawyers, consultants, and banks, with a focus on reporting, scrutinizing, and controlling risks.

Key points of the proposed regulations include:

1. Lawyers, accountants, and consultants involved in setting up trusts, holding companies, or real estate deals will be subject to due diligence rules and reporting obligations.
2. There will be tighter obligations to scrutinize and control risks related to potential sanction violations by clients, particularly in light of international concerns following Russia’s invasion of Ukraine.
3. A central registry for tracking the beneficial owners of legal entities is proposed, which will be held at the Federal Department of Justice and Police. A finance ministry body will conduct checks on the registry and impose sanctions if necessary.
4. All future real estate transactions will undergo due diligence scrutiny.
5. Cash payments for precious metals and gemstones, like gold and diamonds, will be subject to money laundering checks for amounts above 15,000 Swiss francs, down from the current threshold of 100,000 francs.

Switzerland has been working to shed its reputation as a destination for illicit funds and has increased its exchange of bank account information with over 100 countries. However, it continues to face international pressure to provide greater transparency regarding corporate ownership.

The proposed regulations are expected to be presented to the Swiss parliament in 2024 after a consultation period.

These measures align with global efforts to combat money laundering and financial crimes, and experts suggest that consistent enforcement and significant penalties will be crucial to their effectiveness. Switzerland’s stance on financial crime has faced criticism in the past for being too lenient, and these regulations reflect an effort to strengthen its AML framework.

Switzerland’s international partners will be closely monitoring the implementation of these measures to assess their effectiveness, especially regarding enforcement and supervisory capacity. The success of these regulations will depend on the country’s commitment to combating financial crime and ensuring that financial institutions adopt a culture that prioritizes robust AML measures and transparency in beneficial ownership declarations.