Switzerland Takes Steps to Increase Transparency in Fight Against Financial Crime
Switzerland has announced plans to introduce a central register for identifying beneficial owners of legal entities, aiming to boost its reputation and combat financial crime.
Background
The government has asked the finance ministry to draft a bill that would increase transparency and make it easier for authorities to identify illegal activities such as tax evasion and money laundering. This move comes after the Pandora Papers revealed how vast sums of money were being circulated around the world, including Switzerland, through opaque financial structures.
Concerns about Swiss Financial Advisors
Last year, the Pandora Papers named 90 Swiss financial advisors as being involved in these activities. The proposed legislation aims to address concerns about Swiss financial advisors who help wealthy individuals hide their assets.
Criticism and Pressure
Switzerland has faced criticism for not doing enough to crack down on financial crime. In October, lawmakers refused to extend anti-money laundering provisions to lawyers and consultants despite pressure from the Financial Action Task Force (FATF) and non-governmental organizations.
Growing International Pressure
The country is now facing growing pressure from international organizations and anti-corruption campaigners to do more to prevent financial crime. Bill Browder, an anti-corruption campaigner, has called on the US and international organizations to increase pressure on Switzerland to improve its record on fighting money laundering.
Proposed Legislation
The new bill aims to strengthen prevention and prosecution of financial crimes and improve Switzerland’s reputation as a financial center and business location. The proposed measures will include:
- Combatting money laundering
- Adjustments to the anti-money laundering toolkit in the area of legal professions
- Improving transparency by making beneficial ownership information accessible to relevant authorities
Central Register for Beneficial Owners
The register will be accessible to relevant authorities but not publicly available, allowing them to identify beneficial owners and track illegal activities more effectively. Anonymity of beneficial owners has been a major obstacle for authorities in identifying and prosecuting financial crimes.
Timeline and Expectations
The proposed bill is expected to be ready by mid-2023. It remains to be seen how effective it will be in addressing Switzerland’s financial crime problems.