Switzerland to Tighten ID & Monitoring to Tackle Financial Crime

Nicola Sharp of financial crime specialists Rahman Ravelli considers the proposals.

The Swiss government has announced plans to create a central registry to identify corporate legal ownership in an attempt to combat financial crime.

In an attempt to shed its reputation as a safe haven for criminals to store funds, Switzerland’s Federal Council has instructed the Federal Department of Finance to draft a bill to put together a new central register of beneficial owners of companies.

The bill will also include new obligations to update existing information, based on specific risk factors. It is due to be published by the end of June 2023.

The Federal Council stated that it had concluded that there was “room for improvement” in identifying beneficial owners, especially where companies hide the identity of real beneficiaries for criminal purposes.

With Switzerland being a global financial centre, this new bill has the potential to be a significant turning point for the country. It will allow the relevant Swiss authorities to gain clear information about companies that are using banks in Switzerland to hold money, which should make it easier to track and prevent criminal activity.

The announcement of the bill comes shortly after Switzerland’s decision to revise its Anti-Money Laundering Act next year. New due diligence and beneficial ownership reporting obligations will be placed on financial intermediaries, although there will be some exemptions for lawyers, notaries and trustees.

In the past, the Swiss parliament has dismissed proposals to subject legal and financial professionals to the same reporting duties as financial institutions.