Switzerland plans to amend its anti-money laundering law and, once these changes come into force, the financial intermediary will be required to verify information on beneficial owners. The national authorities of Switzerland have been taking various measures in combating the illegitimate funds, amid intense global pressure from various countries and actively discussed the proposed amendments to the Anti-Money Laundering Act.

The proposed bill to amend the anti-money laundering law takes into account certain key recommendations from the Financial Action Task Force’s (FATF) mutual evaluation report on Switzerland, based on a review conducted in 2016. As previously known, in response to the FATF's report, in June 2017 the Federal Council commenced preparation of a consultation draft to deal with the recommendations, at the same time reinforcing the integrity of the Swiss Financial center.

As a result of the above, the Swiss Government proposed the following changes:

i. The updated due diligence requirements for certain services regarding the establishment, management, or administration of companies and trusts. Activities for operating local companies will be excluded due to their low level of risk;

ii. The introduction of a direct responsibility of financial intermediaries to verify information on beneficial owners and to perform regular check-ups and update of client data, the frequency and scope of reviews shall be based on the risk level of contracting party; and

iii. The introduction of new rules for associations which are at risk of being misused for the financing of terrorism or money laundering. As of now, these associations also must be listed in the Swiss commercial register.

The provisions of consultation draft also concern the reporting system for money laundering and the financing of terrorism and its effectiveness. We truly believe in good quality of the Switzerland’s system for combating money laundering and terrorist financing and waiting for the full announcement and final version of the regulations.