In a move that signals a major change for Switzerland’s financial services industry, the Swiss government intends to establish a central registry to track ownership of legal entities. To that end, the cabinet requested that the finance ministry draft proposals by mid-2023 that could make it easier to identify company owners.
The government said the move aims “to strengthen the prevention and prosecution of financial crime and thus the integrity and reputation of [Switzerland as a] financial center and business location,” Reuters reported on Wednesday (Oct. 12).
Switzerland is known as one of the most important financial centers in the world, but long-held banking secrecy laws have in the past been abused by those looking to hide illicit money.
Related: Platforms Turn To Swiss Crypto Banks To Bridge Digital, Traditional Assets
In recent years, however, the country has sought to increase transparency in the financial services sector and share more information with other countries to counter economic crime and money laundering.
Alongside the proposal to record company ownership, the cabinet has floated the idea of expanding anti-money laundering (AML) laws to cover the legal profession. Currently, the law’s due-diligence obligation only applies to financial intermediaries. It should be noted however that the Swiss parliament rejected a similar proposal to expand the scope of AML legislation last year.
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A registry of company ownership will be critical in the fight against money laundering because it will make it harder for criminals to operate through shell companies, a tactic frequently used by criminals and those looking to evade taxes, to obscure the end beneficiaries of their funds.
The government stated that the information recorded won’t be publicly available and will only be accessible to “relevant authorities.”
Switzerland is not the only country where corporate transparency is on the political agenda. As PYMNTS reported recently, several pieces of legislation in the U.K. have also been proposed to help identify company ownership and make it harder to operate via offshore shell companies.
See more: What the UK’s Economic Crime Bills Mean for Anti-Money Laundering Fight
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