As published on step.org/industry-news, Thursday 13 October, 2022.
Switzerland's Federal Department of Finance has been directed to draft a Bill introducing a central register of legal entities' beneficial owners by the end of June 2023.
The announcement closely follows the Swiss Federal Council's decision to set a 1 January 2023 commencement date for its revised Anti-Money Laundering Act, which will impose new due-diligence and beneficial ownership reporting obligations on financial intermediaries, with some exemptions for lawyers, notaries and fiduciaries. Those amendments, approved by the Swiss parliament in March 2021, implement most of the Financial Action Task Force's (FATF’s) 2016 recommendations for Swiss anti-money laundering (AML) reform.
The Federal Council has now instructed the finance department to begin work on a new Bill on increased transparency and easier identification of the beneficial owners of legal entities. It told the Swiss Council of States Economic Affairs and Taxation Committee in December 2021 that there was room for improvement in its existing regime for identifying beneficial owners of legal entities. Moreover, it is mindful of FATF's March 2020 revised guidance document on transparency and beneficial ownership, as Switzerland's implementation of this guidance will be assessed as part of its next FATF mutual evaluation. In addition, the OECD's Global Forum on Transparency and Exchange of Information in Tax Matters issued recommendations to Switzerland in 2020 on how to further improve transparency regarding the beneficial owners of legal entities.
The new central register will be accessible to the relevant public authorities, but not to the general public. The legislation will be drafted jointly by the finance and justice ministries, with the aim of achieving ‘a solution which is as effective and efficient as possible', and strengthening ‘prevention and prosecution in the area of financial crime, and in turn the integrity and reputation of Switzerland as a financial centre and business location'.
The Bill will also tighten the current AML regime. In particular, the Federal Department of Finance has been told to assess whether further adjustments should be made to legal professionals' obligations. The government has said that ‘relevant stakeholders' will be consulted on this topic.