Switzerland Discusses Transparency Register: Banking Secrecy versus Anti-Money Laundering
Switzerland has a historically strong banking secrecy, which makes the disclosure of financial information difficult. The introduction of a national transparency register on the beneficial owners of companies has therefore met with severe resistance in past attempts to introduce it and has so far always prevented its introduction.
However, in recent years, Switzerland has found it increasingly difficult to justify its position vis-à-vis its EU economic partners - especially due to the international sanctions policy following the outbreak of the Ukraine war: Russian bank clients are increasingly transferring funds (as a result of the exclusion of Russian banks from the international SWIFT payment system) to letterbox companies and other dummy companies in order to circumvent sanctions.
The loopholes in Switzerland's sanctions system have long been criticized, but now it looks like international pressure to tighten money laundering prevention efforts has reached a critical point.
Time is also playing against Switzerland: All EU countries have already introduced a government register of beneficial owners, and the USA plans to do so in 2024. In a few years, a majority of all countries should have a transparency register. These are also already being actively used by the authorities there - thanks to uncomplicated access, investigators can easily clarify suspicions even in preliminary criminal proceedings. In Switzerland, on the other hand, public prosecutors have so far had to approach the companies concerned, since in the case of unlisted companies information on the beneficial owner is only available at company level. The internal registers that Swiss companies are already required to keep under the Code of Obligations are also inadequate. Companies are not required to verify the information provided by their shareholders and partners, and the information is difficult to access even for the authorities. Moreover, these regulations mainly apply to stock corporations and limited liability companies, while other legal entities such as associations and foundations are not covered.
So, in the face of this problem and ever-increasing political pressure, Switzerland has now agreed to introduce a national register of beneficial owners of companies and foundations. The idea behind this, in a nutshell, is that prosecutors can speed up their proceedings by having quick access to information about who controls which company. Such a register could thus help, among other things, in the search for assets hidden by sanctioned Russians.
At the beginning of September, the Swiss government sent the amendment to the law creating this national transparency register for consultation. The proposed register, which provides access for authorities and financial intermediaries but not for the public and journalists, could be a first step in the right direction. Switzerland faces the challenge of ensuring that it maintains its international reputation as a financial center of trust and integrity, and that the register actually creates a functioning instrument to combat financial crime.
Sources:
https://www.nzz.ch/schweiz/kampf-gegen-geldwaescherei-bundesrat-stellt-transparenz-register-vor-ld.1753912?reduced=true
https://www.nzz.ch/schweiz/strengere-regeln-fuer-anwaelte-doch-das-berufsgeheimnis-bleibt-ld.1753907
https://www.handelsblatt.com/politik/international/geldwaesche-schweiz-will-anwaelte-bei-geldwaesche-staerker-in-die-pflicht-nehmen/29363328.html?nlayer=Newsticker_1985586&utm_source=headtopics&utm_medium=news&utm_campaign=2023-08-30
https://www.faz.net/aktuell/finanzen/wie-die-schweiz-gegen-geldwaesche-schaerfer-vorgehen-will-19138905.html
https://www.nzz.ch/wirtschaft/der-bundesrat-will-ein-transparenzregister-einfuehren-damit-koennte-auch-die-suche-nach-versteckten-vermoegen-von-sanktionierten-russen-einfacher-werden-ld.1750755
