Switzerland strengthens anti-money laundering framework
The Federal Council adopted the dispatch on strengthening the existing anti-money laundering framework on May 22, 2024, with the goal of reinforcing Switzerland’s integrity and competitiveness as a financial and business location through a federal register of beneficial owners and due diligence for particularly risky legal professions, among other provisions.
The bill’s key provisions are:
- introduction of a federal registry (transparency register) requiring companies and other legal entities in Switzerland to provide information about beneficial owners, with simplified registration for associations, foundations in particular, sole proprietorships and limited liability companies. The registry aims to prevent legal entities in Switzerland from being used to launder money or hide assets. The Federal Department of Justice and Police will manage the registry, which will not be publicly available;
- anti-money laundering due diligence regulations should apply to certain advising activities (particularly legal advice) that pose a significant risk of money laundering. The structuring of companies and real estate transactions are seen as highly risky. Professional secrecy for legal professions is preserved;
- there are further efforts to reinforce the anti-money laundering framework. These include measures to prevent embargo-related sanctions from being violated or circumvented. Cash payments above CHF 15’000 in precious metals trading and without a limit in real estate transactions will be subject to due diligence obligations.
The bill will now be tabled in Parliament. It is unlikely to take effect before early 2026. The steps are in line with the Financial Action Task Force’s international standards for combating money laundering and terrorist financing, as well as the Global Forum’s recommendations.
Implications for SMEs
Swiss firms and legal entities are required to register their beneficial owners in the federal transparency registry, with a simplified approach for most, such as sole proprietorships, limited liability corporations, foundations, and associations. The proposed rules will impose a moderate burden, requiring 20 minutes of work for the first year, and reducing to a few minutes in subsequent years.
Useful links
Press release by the Federal Council dd. May 22, 2024
Fact sheet: Switzerland strengthens anti-money laundering framework (PDF)