Swiss lawmakers are seeking to dilute key government proposals aimed at combating financial crime, arguing that stricter regulations threaten the country’s dominance in the global wealth management sector, according to Reuters.
The effort comes as Switzerland faces growing competition from rival financial centers such as Singapore, Hong Kong, and the United Arab Emirates. A recent forecast by Boston Consulting Group predicts that Hong Kong may overtake Switzerland as the world’s top booking center for cross-border wealth as early as 2025.
The Swiss government’s proposed anti-money laundering (AML) legislation would align the country with recommendations by the Financial Action Task Force (FATF). Key provisions include enhanced transparency on the beneficial owners of companies and trusts, and increased due diligence requirements for financial advisers, lawyers, and trustees.
But those proposals have faced stiff resistance in parliament. In June, lawmakers excluded charities and non-profits from the government’s planned beneficial ownership register and exempted trust structures, a move Swiss Finance Minister Karin Keller-Sutter warned would undermine efforts to combat money laundering and terrorism financing.
Parliament’s upper house also weakened due diligence rules by exempting some lawyers from the requirements entirely. Lawmakers from the right-wing Swiss People’s Party, the center-right Liberals, and The Centre hold a parliamentary majority and have argued that the proposed regulations are too burdensome for financial service providers.
While Switzerland has implemented the OECD’s minimum 15% corporate tax rate and the final Basel III banking standards ahead of many rivals, it continues to face scrutiny over lingering opacity. The country currently ranks second only to the United States on the Tax Justice Network’s Financial Secrecy Index.
Read more at Reuters