Financial Crime World

Switzerland Takes a Stand Against Financial Crime

In recent years, Switzerland has taken significant steps to combat financial crime, corruption, and tax evasion. The country’s efforts aim to strengthen its position as a global financial hub while adhering to international standards.

Automatic Exchange of Financial Account Information (AEOI)

Since 2017, Switzerland has participated in the AEOI mechanism with over 100 partner states. In 2021, it transmitted data on some 4 million financial accounts to its 96 partner states.

  • Benefits: The AEOI has helped to prevent illicit financial flows and ensure transparency in international financial transactions.
  • Partnerships: Switzerland’s participation in the AEOI mechanism demonstrates its commitment to collaborating with other countries to combat financial crime.

Administrative Assistance

Switzerland provides tax-related information to its network of over 140 states within the framework of administrative assistance in tax matters. From 2019 to 2021, it responded to over 3,000 requests, more than almost any other country.

  • Cooperation: The Swiss judicial authorities cooperate with their counterparts abroad in cases of cross-border crime, including large-scale cases such as Petrobras (Brazil) and 1MDB (Malaysia).
  • Effectiveness: Administrative assistance has been instrumental in combating financial crime and ensuring that those responsible are held accountable.

Prevention of Base Erosion and Profit Shifting

As an OECD member, Switzerland actively participates in the base erosion and profit shifting (BEPS) project and implements the agreed BEPS minimum standards. These require all large multinationals to disclose their global breakdown of turnover and taxes paid.

  • Compliance: Switzerland’s participation in the BEPS project ensures that it remains compliant with international standards and regulations.
  • Transparency: The disclosure requirements help to promote transparency and prevent base erosion and profit shifting.

Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT)

Switzerland has adapted its AML/CFT legislation several times in recent years to make it compliant with international standards. The Financial Action Task Force (FATF) has certified that Switzerland’s current system is generally robust and effective.

  • Compliance: Switzerland’s adaptation of its AML/CFT legislation ensures that it remains compliant with international standards.
  • Effectiveness: The certification by the FATF demonstrates that Switzerland’s AML/CFT system is effective in preventing money laundering and terrorist financing.

Extractive Sector

Switzerland supports the Extractive Industries Transparency Initiative (EITI) through funding and representation on the EITI Board. The revised Swiss company law now requires large companies operating in the extractive sector to disclose payments of more than CHF 100,000 made to government agencies.

  • Transparency: The disclosure requirements help to promote transparency in the extractive sector.
  • Accountability: The revised company law ensures that companies operating in the extractive sector are held accountable for their activities.

Asset Recovery

If assets originating from offences listed in the United Nations Convention against Corruption (corruption, money laundering, etc.) enter the Swiss financial sector, Switzerland is prepared to provide assistance to freeze these assets with a view to their confiscation and return. Over the past thirty years, Switzerland has returned more than USD 2 billion to affected populations.

  • Asset recovery: Switzerland’s asset recovery efforts help to ensure that those responsible for corruption and other crimes are held accountable.
  • Return of assets: The return of assets to affected populations helps to restore justice and promote transparency.

Anti-Corruption

Switzerland is actively involved in several international anti-corruption mechanisms, including the G20 anti-corruption working group, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the United Nations Convention against Corruption. Switzerland also engages in anti-corruption dialogue with international sports federations.

  • Anti-corruption efforts: Switzerland’s involvement in international anti-corruption mechanisms demonstrates its commitment to combating corruption.
  • Collaboration: The anti-corruption dialogue with international sports federations helps to promote transparency and accountability in the sports sector.

Institutional Strengthening and Capacity Development

Capacity development helps to strengthen state institutions in developing and emerging countries. Switzerland supports the Global Forum’s plan of action to assist developing countries in building the necessary capacity for the automatic exchange of information (human resources, IT infrastructure, legal framework, risk management).

  • Capacity development: Switzerland’s support for capacity development helps to strengthen state institutions in developing and emerging countries.
  • Global cooperation: The partnership with the Global Forum demonstrates Switzerland’s commitment to global cooperation and its willingness to work together with other countries to combat financial crime.