Federal Council initiates Consultation on Amendments to strengthen Anti-Money Laundering Framework   

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 new register is to be maintained by the Federal Department of Justice and Police (FDJP), based on close cooperation with the commercial register authorities. However, only the com-petent authorities will have access to the register. The public would therefore be excluded from access. 
In the event of non-compliance with the new regulations, the competent authorities have various sanction options at their disposal. If necessary, reminder fees can be levied and the criminal law service of the Federal Department of Finance (FDF) can impose criminal sanctions (possibly fines of up to CHF 500,000) for violations of the legal obligations (art. 41 et seq. VE-TJPG).  

New due diligence obligations for lawyers
In addition to the new Transparency Act, various minor amendments to other enactments are also planned, in particular a partial revision of the AMLA. Due diligence obligations under money laundering law, which previously applied only to the financial sector, are now also to apply to certain other advisory activities that involve an increased risk of money laundering. This applies in particular to service providers in the legal field and thus to lawyers, notaries and self-employed legal professionals. These persons are to be obliged to establish and document the identity of their contracting party, the beneficial owner, and the purpose of a transaction.

The consultation on the proposed legislation will continue until November 29, 2023, and the Federal Council is expected to submit the dispatch to parliament in 2024.