Financial Crime World

Switzerland Makes Progress in Counter-Terrorism Financing Regulations, But More Efforts Needed

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The Financial Action Task Force (FATF) has published Switzerland’s fourth follow-up report, acknowledging the country’s progress in combating financial crime. However, further improvements are necessary to ensure a high level of integrity in the Swiss financial centre.

Maintaining an Effective System for Combating Financial Crime

Maintaining an effective system for combating financial crime is crucial for ensuring the integrity and long-term success of Switzerland as a secure and future-oriented financial hub and business location. The Federal Department of Finance (FDF) can rely on the substantial commitment of all Swiss authorities involved in anti-money laundering and counter-terrorism financing efforts.

Progress Made by Switzerland

The recognition of Switzerland’s progress by the FATF, the leading international organization in this field, is an important achievement for the country. In 2016, the FATF identified major shortcomings in the implementation of nine of its 40 recommendations. Switzerland has since largely addressed the shortcomings related to six recommendations, including those on customer due diligence, thanks in part to amendments to the Anti-Money Laundering Act (AMLA).

Areas for Further Improvement

Despite this progress, the Federal Council believes that further measures are necessary to ensure the integrity of the financial centre. This includes:

  • Improving transparency in legal entities and advisory activities, particularly in relation to company structuring and trusts
  • Meeting international standards, which are constantly evolving
  • Implementing a register of beneficial owners and due diligence requirements for high-risk activities in legal professions

Ongoing Efforts

To address these concerns, the Federal Council has launched a consultation on a proposal for the introduction of a register of beneficial owners and due diligence requirements for high-risk activities in legal professions. The consultation period will run until November 29th.

Future Outlook

The next FATF mutual evaluation of Switzerland is expected to take place in 2027/2028. Switzerland aims to remain a secure and future-oriented financial hub and business location by maintaining a robust system for combating financial crime, with continued commitment from all Swiss authorities involved.

Conclusion

In conclusion, while Switzerland has made progress in combating financial crime, further efforts are needed to ensure the integrity of the financial centre. The Federal Council is committed to implementing measures to improve transparency and meet international standards, ensuring that Switzerland remains a secure and future-oriented financial hub and business location.