As the legislative debates on the planned anti-money laundering reform advance in the Swiss parliament, Transparency International is urging lawmakers to consider critical issues which, as things currently stand, would fall outside the regulation. The Swiss Federal Council intends to implement two key measures: establishing and expanding a transparency register for the beneficial owners of legal entities and expanding the scope of the Anti-Money Laundering Act to include certain advisory activities, introducing customer due diligence and reporting requirements for lawyers and notaries. However, sluggish parliamentary debate has raised serious questions about the true willingness to reform, potentially jeopardising these measures and undermining Switzerland’s efforts to meet global anti-money laundering standards.
Numerous past cases have exposed Switzerland as an important hub where corrupt foreign elites have easily found intermediaries to create and manage companies and trusts for them. To help end the country’s reputation as a major destination for corrupt money, the new legislation seeks to tighten the anti-money laundering framework.
However, a series of changes introduced by the parliament in recent months and weeks, risk leaving serious loopholes. In one proposed change, called “presumption of correctness”, measures have been weakened to ensure that information submitted by companies about their beneficial owners would not have to be independently verified. In essence, this would allow the government to assume whatever information provided regarding a company’s owners is correct.
The current draft of the law also allows for trusts and certain types of legal entities to escape scrutiny by not requiring them to disclose beneficial owners in the transparency register. This means that the corrupt could still hide behind certain types of legal entities and trusts created in Switzerland.
Another gap in proposals is that they do not yet sufficiently require all professionals like lawyers and notaries – when involved in activities that raise the risk of money laundering – to report suspicious activity. Global anti-money laundering standards clearly require comprehensive due diligence and reporting obligations for professionals in the non-financial sector when providing services such as setting up a company or a bank account. Switzerland’s planned reform on the other hand would provide for far-reaching exceptions.
Unfortunately, this is not the first-time anti-money laundering reforms in Switzerland have been watered down. The current case echoes past reforms where heavy lobbying by industries led to major loopholes remaining. While other financial hubs like Hong Kong and the United Arab Emirates implement some reform, Switzerland continues to lag behind.
Transparency International Switzerland has been actively advocating on these issues, providing detailed input to legislators.
Maira Martini, Chief Executive Officer of Transparency International, said:
“Switzerland is at an important juncture. It must decide whether it will swiftly move ahead with its planned anti-money laundering reform or remain a major global destination for dirty money. What gaps in the proposed legislation reveal is that the government needs to urgently prioritise the fight against money laundering and financial crime, in order to bring about meaningful reforms.”
The Financial Action Task Force, the global standard-setter on anti-money laundering, has previously been clear on the outstanding deficiencies in Switzerland’s anti-money laundering framework. Policymakers in Switzerland must not buckle under pressure from lobbyists but signal to the international community that they are taking the fight against money laundering seriously, with an effective beneficial ownership register and requirements for professionals in the non-financial sector that meet global standards. The country’s reputation as one which seeks to fight transnational corruption depends on it.
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The statement was updated on 1 April 2025.
