The government is determining how the fight against money laundering should be tightened up next. Rules are evolving rapidly around the world; Switzerland can hardly stand still.
Finance Minister Ueli Maurer expected that duties for lawyers will soon become an issue again
The global fight against money laundering is like a high jump competition: the bar is being raised every year and all participating countries are striving to keep up. After all, anyone who opts out will sooner or later end up on a gray or black list of uncooperative states.
The Federal Council decided this Wednesday to tackle the next level: It wants to create a central register in which the beneficial owners behind all Swiss companies are listed. This register should only be accessible to “relevant authorities”, but not to the public. The Federal Council is looking for a workable compromise here, it wants to create transparency without making this information publicly available.
In addition, new obligations are to be created to keep the information about these “effectively entitled persons” up to date. This should be risk-based, which means in short: What looks like a mere letterbox company must be checked more often than, for example, a painting SME with a handful of employees and an order situation that is customary in the industry.
To this end, the Federal Council has instructed the Finance Department to draw up a bill by the summer of 2023. Interestingly, the state government wants to re-examine “whether further adjustments to the anti-money laundering measures, for example in the area of legal professions, should be made”.
The letter of intent contains explosive material. As part of the most recent amendment to the Money Laundering Act, the Federal Council wanted to impose stricter due diligence and reporting obligations on lawyers and trustees. But the well-connected lawyers in Bern managed to avert this tightening with reference to attorney-client privilege.
However, Finance Minister Ueli Maurer already warned in the parliamentary debate that sooner or later the duties for lawyers could come up again. In the banking sector, too, people were not at all happy about the parliamentary leniency towards the legal professions. The banks feared that the reputation of the Swiss financial center could suffer as a result.
After all, the Federal Council and Parliament are not acting in a vacuum when it comes to combating money laundering. There is a strict referee in global competition: the so-called Financial Action Task Force (FATF). It is an internationally broad-based body that “recommends” uniform guidelines for all countries in the fight against money laundering and monitors compliance with them. With the exception of the USA, which may be too big to sanction, no Western financial center can afford to fundamentally ignore the FATF recommendations in the long term.
Switzerland passed its last inspection in 2020, without bravura, but also without ending up on a gray list. Nevertheless, the FATF auditors recommended some improvements; among other things, the further obligations for the lawyers. It was not until spring 2022 that the FATF also made a recommendation to the federal states to create such central registers of beneficial owners; already in the next round of exams it will check whether the federal states have already implemented this recommendation.
The bar when it comes to combating money laundering is therefore being raised a few centimeters again, and Switzerland is making a start. It remains to be seen how high Parliament wants to jump this time.