On 22 May 2024 the Swiss Federal Council[i] decided on submitting further reforms in the realm of the anti-money laundering (AML) framework to the Parliament, with an aim to reinforce the competitiveness of the country both as a financial centre and a commercial hub.
These reforms, which are expected to come into force by early 2026, include the introduction of a non-public federal (transparency) register of beneficial owners. A simplified registration will be provided for not only associations and foundations but also sole proprietorships and limited liability companies. The register will be managed by the Federal Department of Justice and Police (FDJP).
Other proposals refer to the AML due diligence obligations applicable to certain advisory activities, in particular legal advice. While maintaining professional secrecy, these obligations will kick-in in certain activities with a potentially increased money laundering risk, such as the founding and structuring of companies as well as real estate transactions.
Precisely speaking, the following will be pivotal:
. The client’s identity must be verified and the beneficial owner and the object and purpose of the transaction or service must be identified;
. If the client, or the transaction or service, has a particularly high risk profile, it may be necessary to clarify the origin of the funds or to request additional explanations about the purpose of the requested transaction or service;
. The measures undertaken in connection with due diligence must be appropriately recorded.
In this respect, the responsibility for supervising the exercise of due diligence obligations by the affected lawyers and legal advisors will be vested upon the self-regulatory organisations (SROs).
Furthermore, additional organisational measures will be set in place against i) circumvention of sanctions under the Embargo Act, ii) cash payments exceeding CHF 15,000 in precious metals trading and iii) any amount in real estate business.
On a different note, on 22 May 2024 the Federal Council[ii] launched a consultation, set to run until mid September 2024, on the Cybersecurity Ordinance which essentially outlines the implementation of the obligation to report cyberattacks on critical infrastructures and the national cybersecurity strategy as well as the duties of the Swiss National Cyber Security Centre (NCSC).
The Ordinance also specifies exempted entities from the reporting obligation, namely those suffering a cyberattack which have no direct impact on the functioning of the economy or the well-being of the population. In addition, a general exemption would apply to companies with fewer than 50 employees, an annual turnover or annual balance sheet total of less than CHF 10 million and authorities that are responsible for fewer than 1,000 inhabitants.
Lastly, on 15 May 2024 the Federal Council[iii] decided to initiate a consultation, applicable until early September 2024, on extending the international automatic exchange of information in tax matters (AEOI). Set to apply from 1 January 2026, the extension would concern the new AEOI regarding cryptoassets and the amendment of the standards for the automatic exchange of financial account information.
Notably, the OECD update to the common reporting and due diligence standards for financial account information (CRS) and the new cryptoasset reporting framework (CARF) was published in October 2022. While the amendments to the CRS clarify interpretation issues and take practical experience into account, the CARF regulates the handling of cryptoassets and their providers.
Subject to parliamentary approval, Switzerland thus intends to also implement the CARF with an intention to effectively address existing gaps in the tax transparency mechanism and to ensure equal treatment with respect to traditional assets and financial institutions.
[i] See here https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-101100.html.
[ii] See here https://www.ncsc.admin.ch/ncsc/en/home/dokumentation/medienmitteilungen/newslist.msg-id-101088.html.
[iii] See here https://www.admin.ch/gov/en/start/documentation/media-releases/media-releases-federal-council.msg-id-101030.html.
