Swiss legislators opposed the government’s anti-money laundering law in an attempt to maintain the country’s competitiveness. The lawmakers said the initiative aims to make the country more competitive in global cross-border wealth management, where countries like Singapore and the UAE are gaining ground.
Boston Consulting Group forecasted that Switzerland could lose its crown as the world’s largest wealth management hub as early as this year. The country intensified its focus on competitiveness after the Trump administration imposed 39% tariffs.
The country’s government said lawmakers began finding ways to strengthen the nation’s economy after the heightened U.S. trade policies.
Swiss AML regulation seeks transparency on countries’ shell companies
The Swiss government said at the time that legislators would focus more on regulatory relief for Swiss companies and push back on new rules that incur high business costs. The government said in August that it wants to decisively press ahead with its economic policy agenda and focus on reducing the regulatory burden on companies.
Lawmakers have based the current retaliation on the government’s anti-money laundering drive on competitive grounds, similar to what they used in the debate over proposed new capital rules for Switzerland’s biggest bank, UBS. The AML legislation seeks to implement requirements by the Financial Action Task Force, calling for nations to come clean on shell companies.
Member of the Swiss People’s Party Barbara Steinemann argued that Switzerland tends to implement rules whenever there is foreign pressure on financial transparency. She believes the initiative drives up bureaucracy and erodes competitiveness, even as other financial centers hold back.
“This is about a war between financial centers and economic interests. The Americans and other European countries would like to take over our business.”
-Barbara Steinemann, Member of the National Council of Switzerland.
The country established the OECD’s minimum 15% tax rate for large companies last year and final Basel III banking standards this year. Lawmakers are also against the government’s tighter legislation that prevents rogue lawyers, saying that the laws are unnecessary and burdensome.
Swiss politician Simone Giannini argued that the drive for transparency must not lead to overregulation. The Swiss People’s Party and the centrist party, The Center, also pushed back against a similar anti-money laundering bill five years ago.
In June, the Swiss government also excluded non-profit groups, including charities, from a planned transparency register to reveal beneficial owners.
Lawmakers also excluded trust arrangements from the register schemes. Swiss Finance Minister Karin Keller-Sutter said trust arrangements are prone to crime and can be used to conceal a client’s identity.
Swiss parliament reduces due diligence obligations for advisors
The parliament also reduced due diligence obligations for advisors, exempting some lawyers from implementing such safeguards. The Swiss finance minister stated that the amendments have diluted the range of those lawyers covered by the obligations.
The Boston Consulting Group revealed that all other major financial centers grew more rapidly in 2024 in percentage terms compared to Switzerland. According to the report, Singapore led with nearly 12% growth in cross-border wealth. The company also forecasts that Hong Kong will become the world’s leading booking centre for cross-border wealth in 2025.
British non-profit firm Tax Justice Network ranks Switzerland second after the U.S. on a list of the world’s top financial secrecy enablers. The head of the Swiss financial crime unit, Anton Broennimann, said the country must prevent itself from becoming attractive to criminals due to competitive considerations. He also welcomes stricter rules for high-risk activities in the financial advisory sector, despite other countries not having any obligations in that sector.
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