Federal Council Initiates Consultation On Amendments To Strengthen Anti-Money Laundering Framework

• Published date: 04 April 2024
• Subject Matter: Government, Public Sector, Money Laundering
• Law Firm: Staiger Attorneys at Law
• Author: Georgia Fotiou and Lucas Manz

On August 30, 2023, the Federal Council initiated the consultation on the draft law to strengthen the fight against money laundering. The implementation initially provides for a new Federal Law on the Transparency of Legal Entities and the Identification of Beneficial Owners (TJPG). At its core is the introduction of a national register in which legal entities domiciled in Switzerland must register. The legal entities covered are set out in art. 2 VE-TJPG and include foundations. The companies concerned are to be obliged to identify their beneficial owners, check them themselves, and then report them to the register. This is intended to bring Switzerland into line with EU member states, the UK, and the U.S. in particular, where such national transparency registers already exist.

New regulations for trusts

According to art. 1 (3) and art. 2 (3) VE-TJPG, trusts are also covered by the law. However, special rules are provided for them. For example, trusts do not have to be entered in the register. While professional trustees with seat in Switzerland already have an identification and verification obligation under the current Anti-Money Laundering Act (AMLA), such an obligation is now also provided for non-professional trustees (art. 16 VE-TJPG).

Definition of the beneficial owner

According to art. 4 VE-TJPG, a beneficial owner is a person who, directly or indirectly, alone or in arrangement with a third party, holds at least 25 percent of the capital or voting rights in the le-gal entity or who exercises control in another manner. What control in another way means will have to be defined in more detail by the Federal Council in an ordinance. The criteria will in-clude, for example, the ability to exercise significant influence on the decisions of the company, in particular through veto or decision-making rights. If all of these criteria do not apply to any person, the highest-ranking member of the management body shall be deemed to be the bene-ficial owner.

Responsibility and sanctions

The...