The Swiss Federal Council, in a release, announced the adoption of a new legislation to bolster the anti-money laundering framework on Wednesday, 22 May, 2024. This includes the establishment of a federal register of beneficial owners.
The aim of this bill is to reinforce the integrity and competitiveness of Switzerland as a financial and business location by means of a federal register of beneficial owners and due diligence for particularly risky activities in legal professions, as well as other provisions.
During the consultation, which ran from August to November, 2023, the draft legislation was generally well received. The bill will now be presented to Parliament. It is not expected to come into force until the start of 2026 at the earliest.
A federal register (transparency register) will be introduced, in which companies and other legal entities in Switzerland will have to enter information on their beneficial owners.
The draft for a new Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners provides for simplified registration for associations and foundations in particular, but also for other legal forms such as sole proprietorships and limited liability companies. In particular, the register should allow the law enforcement authorities to identify who is really behind a legal structure with greater speed and certainty.
The aim is to prevent legal entities in Switzerland from being used to launder money or conceal assets.
The federal register will not be publicly accessible. It will be managed by the Federal Department of Justice and Police (FDJP), in order to make use of the existing infrastructure and the know-how of the authorities running the commercial register.
Anti-money laundering due diligence rules should henceforth apply to certain advisory activities (especially legal advice) which carry a high risk of money laundering. This takes up the proposal already discussed by Parliament in 2019.
The structuring of companies or transactions with real estate are considered to carry particular risks. Specific regulations take into consideration lawyers’ and notaries’ duty of professional secrecy.
There are also a series of additional measures to strengthen the anti-money laundering framework. These include measures to prevent sanctions under embargo legislation from being breached or circumvented.
In addition, while it is still possible to make cash payments over CHF 15,000 in precious metals trading and for any amount in real estate business, these will be subject to due diligence obligations.
In view of the criticisms voiced during the consultation process, the reform of the system of sanctions for SROs will not be proposed.