The Swiss government is introducing new rules to fill loopholes in anti-money laundering legislation. This is happening after pressure from the United States, among other countries. Lawyers and consultants must communicate risks. Supervision of legal entities, such as trusts, will also be tightened. Parliament has not yet voted on the proposals.
Swiss banks are the largest managers of offshore assets in the world. The state attaches great importance to its banking secrecy, but at the same time it wants to get rid of its image as a safe haven for crime money. Many steps have been taken in this direction in recent years. For example, the country exchanges banking details with more than 100 countries.
However, Switzerland is under international pressure to do more. This includes the murky world of trusts and other identities, which obscure the true beneficiary of funds and companies.
More than two years ago, the Swiss Parliament rejected a draft law that would have included advisors and lawyers in the money laundering law. According to politicians, the law violates the duty of confidentiality that advisors and lawyers have towards their clients.
The new bill attempts to turn around this abyss. There will be a registry in which companies and other legal entities must register the names of the actual owners. If Parliament passes the new rules, lawyers, accountants and other business advisers who set up trusts, holding companies or arrange property deals will also be subject to due diligence rules and reporting obligations. Lawyers’ duty of confidentiality is respected, but lawyers must also explain and document the beneficial owners behind the deal and what they intend to do with it.
Guidance from the International Financial Action Task Force requires that lawyers, accountants and other business advisors be covered by anti-money laundering provisions if transactions are not already covered elsewhere. Countries such as Germany and France have already done this. In Switzerland, opponents say this is not necessary. Transactions initiated by advisors and agents typically result in a relationship with a financial intermediary subject to due diligence obligations. Additionally, it is important to protect attorney-client privilege.
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