Swiss want more transparency in fight against money laundering

Switzerland has been criticised for turning a blind eye to legal advisors and others who allow wealthy people to hide their money. © Keystone / Gaetan Bally

The Swiss government has asked the finance ministry to draft a bill to increase transparency of beneficial owners of legal entities to help tackle financial crime.

The bill should introduce a central register for identifying beneficial owners and new obligations when it comes to risks of financial crime, the government said in a statementExternal link on Wednesday. The register will be accessible to relevant authorities but not publicly available.

“The Federal Council places great emphasis on combating financial crime and this bill is a further step towards reinforcing the Swiss mechanisms in this regard,” it said. Anonymity of beneficial owners, who ultimately own or control a legal entity, makes it difficult for authorities to identify illegal activities such as tax evasion and money laundering.

Switzerland has been criticised for not doing enough to crack down on Swiss financial advisers who help wealthy and powerful people move their money around the world.

Last October the Pandora Papers revealed how vast sums of money circulate around the world, including Switzerland, via opaque financial structures. Some 90 Swiss advisers were mentioned in the documents collected by the International Consortium of Investigative Journalists (ICIJ).

A few months prior to the Pandora Papers Swiss lawmakers refused to extend anti-money-laundering provisions to lawyers and consultants despite mounting pressure from the Financial Action Task Force and NGOs.

Improve Swiss reputation

On Wednesday the government said this draft bill, which should be ready by mid-2023, is intended to “strengthen prevention and prosecution in the area of financial crime, and in turn the integrity and reputation of Switzerland as a financial centre and business location”.

It should include measures to combat money laundering, including whether adjustments should be made to the anti-money-laundering toolkit, specifically in the area of legal professions.