Switzerland unveils anti-money laundering campaign

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Switzerland has proposed sweeping measures to crack down on money laundering in a bid to shake off the country’s reputation as a haven for illicit gains.

Finance Minister Karin Keller-Sutter on Wednesday unveiled reforms to increase transparency and close legal loopholes by requiring the ultimate “beneficial owners” of trusts and corporations to be declared.

At present, Switzerland is the only European country that does not have such a national property register.

Critics say the country’s current system has been abused by oligarchs and criminals around the world to hide ownership of assets using Swiss institutions and expertise.

“A strong financial crime protection system is essential to the reputation and lasting success of an internationally important, secure and forward-looking financial centre,” said Keller Sutter. “Money laundering harms the economy and jeopardizes confidence in the financial system.”

Switzerland, with a population of just 8.7 million, is the world’s No. 1 center for offshore wealth, with its banks holding an estimated $2.4 trillion in foreign assets.

The country’s financial community also plays a large role in helping to set up and sponsor trusts and offshore structures in other jurisdictions.

Keller-Sutter said Switzerland had a good reputation internationally for upholding financial standards, but acknowledged that there were “gaps.”

Switzerland has come under international pressure, especially in recent months, to tighten its financial controls as a result of Russia’s comprehensive invasion of Ukraine.

Although the rich Alpine nation moved closely with the European Union in imposing sanctions on Russia, critics accused Bern of not adequately monitoring compliance.

Switzerland’s long history as a favored business and leisure haven for the Russian elite continues to impact the country’s reputation among its Western peers.

In April, G7 ambassadors in Bern criticized the Swiss government in a joint letter for turning a blind eye to several “loopholes” in Swiss law – and the role Swiss lawyers played in exploiting them – which they said were being used to facilitate matters. evading penalties.

The proposed reforms are the second time in three years that Switzerland has reformed its laws against financial crimes.

The new register of beneficial owners of all corporate entities and trusts established in the country will not be available to the general public.

But it will be available to regulators, government and police as well as approved banks and lawyers who do their due diligence to access it.

A second set of measures will tighten the obligations imposed on Swiss lawyers, accountants and other service providers. This will require them to conduct customer due diligence, maintain check records, and report suspected money laundering cases to official authorities.

The proposals are still a long way from becoming law. Under Switzerland’s consensus-based political system, a period of consultation is needed with political parties, cantonal governments and civic groups, including influential banking lobbies and lawyers. This will take place over the next three months, before formal legislation is presented to Parliament next year.

Critics warn that the final measures could be significantly watered down. The proposals do recommend that compliance with the new rules be “self-regulated” for corporate service providers.

Recent high-profile lawsuits have cast a spotlight on Swiss financial practices and undermined confidence in Bern’s assertions that it properly monitors financial flows within its borders.

A Zurich court convicted four senior bankers this year of facilitating the laundering of tens of millions of dollars in money that prosecutors said was directly linked to Russian President Vladimir Putin himself.

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