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Switzerland Unveils Money Laundering Reforms

Switzerland Unveils Money Laundering Reforms

by Starling Insights

Starling Insights Editorial Board

Sep 11, 2023


Late last month, Karin Keller-Sutter, Switzerland's Finance Minister, unveiled a package of reforms aimed at combatting money laundering and enhancing transparency as the country seeks to shed its reputation as a hub for the movement and concealment of illicit funds. 

The reforms would require "beneficial owners" of trusts and companies to be declared as such, both in order to increase transparency and to close legal loopholes. Notably, Switzerland is currently the only European nation lacking a national register of beneficial ownership. 

"A robust system to protect against financial crime is essential to the reputation and lasting success of an internationally significant, secure and forward-looking financial centre," Keller-Sutter said. 

The new register of beneficial owners would be accessible by regulators, government, and police, as well as accredited banks and lawyers performing due diligence. Additionally, Swiss lawyers, accountants, and service providers will face stricter relevant obligations themselves, such as conducting due diligence on clients and reporting suspected money laundering cases to authorities.

However, the reforms have a long road to becoming law, as Switzerland's consensus-based political system mandates a consultation period with various stakeholders before relevant legislation can be introduced in parliament. As such, some critics have expressed concerns that the final measures may be significantly watered down.

If Switzerland and its banks hope to build a more positive reputation, and regain trust, they must demonstrate seriousness with regard to anti-money laundering obligations. This is especially true as other governments, and the public, expect a consistent application of the sanctions placed against Russia following its invasion of Ukraine. 

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