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Switzerland drafts tighter rules to combat money laundering

ZURICH – Switzerland on Wednesday said it had drafted new rules to tighten perceived cracks in its money laundering regulations, holding lawyers and consultants accountable for reporting risks and stepping up oversight of legal entities, such as trusts.

The new rules, drafted by the Swiss government, will be presented to Parliament in 2024 following consultation. Switzerland, whose banks make it the world’s biggest manager of offshore wealth, has long sought to fight its old image as a place for criminals to stash ill-gotten gains. It routinely exchanges bank account information with over 100 countries.

But it has faced international pressure to shed more light onto the shadowy world of corporate ownership, where many companies and entities like trusts cloak the identity of real beneficiaries.

If the new rules are accepted, lawyers, accountants and other company consultants who set up trusts, or holding companies, or arrange real estate deals, will also become subject to due diligence rules and reporting obligations.

The government also detailed its plans to create a central registry to track who actually owns legal entities in a move to fight money-laundering via shell companies, first floated last October.

The new register, to be held at the Federal Department of Justice and Police, would detail the beneficial owners of companies and other legal entities, with a body within the finance ministry carrying out checks on the registry and, if necessary, imposing sanctions.

The rules would also tighten obligations for banks, firms and service providers to scrutinise and control risks of sanctions violations among their clientele – a major topic of international focus since Russia’s invasion of Ukraine.

Under the proposed rules, all future real estate deals would also be subject to due diligence scrutiny, while cash payments for precious metals and gemstones, such as gold and diamonds, would be subject to money laundering checks above a value of 15,000 Swiss francs (S$23,000), down from 100,000 francs currently. REUTERS

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