Minister: Swiss financial advisers must comply with money laundering law
Swiss lawyers, notaries and other consultants should be subject to due diligence obligations under the money laundering law, says Finance Minister Karin Keller-Sutter. Parliament exempted them during a modest legal revision two years ago.
“We must not rush headlong. It is useless if parliament abolishes it again. But the Federal Council (executive body) is of the opinion that it is necessary,” Keller-Sutter told the Tamedia press group in an interview published on Saturday.
Swiss lawmakers agreed to tighten up the money laundering law in March 2021 but rejected new rules for lawyers, notaries and other consultants that would have made them subject to due diligence requirements in the Money Laundering Act. Anti-corruption campaigners have criticised this loophole.
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In Saturday’s interview the finance minister said the authorities had been working on plans for a central register to identify the beneficial owners of legal persons since October. Swiss financial advisors would be part of this initiative.
Switzerland’s financial centre is crucial to the country and money laundering is a risk to its reputation, said Keller-Sutter.
“We have every interest in reducing the vulnerable zone as much as possible,” she said.
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Switzerland’s revised law on money laundering came into force at the beginning of 2023. Under the revision, financial intermediaries are required to verify the identity of customers, record which services have been provided to them, and clarify their background and purpose.
Associations that collect or distribute funds abroad for charitable purposes are also required to be more transparent. They have to sign up to the commercial register, appoint a representative in Switzerland and keep a list of their members for five years.
Another key revision is the reporting of suspicious activity. Parliament agreed that banks are obliged to inform the Money Laundering Reporting Office Switzerland (MLROS) when they have any “well-founded suspicion” of criminal funds.
The revised law does not however include specific measures covering financial advisors, which had drawn the ire of corruption watchdogs. The “Panama Papers”, the work of a network of journalists who uncovered tax avoidance and money laundering on an epic scale, put the role of lawyers and consultants in the spotlight.
The investigation showed that 1,339 Swiss lawyers, financial advisors and other middlemen had set up more than 38,000 offshore entities over the last 40 years. These entities listed 4,595 officers – or administrators – that are also connected to Switzerland.
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