Switzerland implements the revised FATF recommendations of 2012
On 29 April 2015 the Swiss government, the Federal Council in Berne, announced that the revised Financial Action Task Force (FATF) recommendations of 2012 will come into effect in two stages. Some of the recommendations will apply as of 1 July 2015, while some will apply from 1 January 2016. The main focus of the new provisions is on (a) enhanced transparency for legal persons, (b) expanding the range of predicate offences to which money laundering regulation applies, to include qualified tax crimes, and (c) restrictions on cash payments in excess of CHF 100,000.
Enhanced transparency for legal persons
Effective as of 1 July 2015, inter alia, the following changes to the Swiss company law will enter into force:
- Anyone acquiring bearer shares in a non-listed company must, within a month, report such transaction to the company and disclose his or her contact details and some other information. Persons who have acquired bearer shares prior to 1 July 2015 must comply with the new disclosure obligations by 31 December 2015.
- Anyone, acting individually or acting in concert with third persons, who acquires shares in a non-listed company and thereby reaches or exceeds the threshold of 25 percent of the share capital or the votes must, within a month, disclose the name and contact details of the ultimate beneficial owner for whom he or she acts to the company. This applies with respect to both bearer and registered shares. Owners of bearer shares must also disclose the ultimate beneficial owner of shares which they have acquired prior to 1 July 2015.
- The company, or a financial intermediary appointed by the company, must keep a register of the owners of bearer shares and of the disclosed beneficial owners.
- As long as a shareholder does not comply with his or her disclosure obligations his or her membership rights are suspended. Moreover, unless the disclosure is made within one month, monetary rights which have come into existence prior to the disclosure are forfeited.
Qualified tax crimes as predicate offence
Effective as of 1 January 2016, the range of predicate offences to which money laundering regulation applies, will be expanded to include qualified tax crimes. Qualified tax crime means, in essence, any tax offence regarding Swiss or foreign direct taxes where forged, falsified or untrue documents have been used and more than CHF 300,000 have been evaded in a tax period. This is a landmark change in the Swiss fight against money laundering. Until now only qualified tax fraud regarding indirect taxes in connection with smuggling as a member of a group has counted as a predicate offence. Financial intermediaries will, however, be faced with the difficulty of discerning the incorrect character of the documents used by their contracting parties and, unless they are aware of the complete financial situation of their clients and the applicable tax laws, the calculation of the threshold of CHF 300,000.
Restrictions on cash payments
Also effective as of 1 January 2016, any person who, on a professional basis, deals with goods and thereby accepts a cash payment in excess of CHF 100,000 will essentially be subject to the same due diligence and
reporting duties as a financial intermediary. Such duties include the verification of the contracting party and the beneficial owner as well as documentary duties and, if certain criteria are met, enhanced due diligence duties.
Further changes resulting from the implementation of the revised FATF recommendations of 2012 include:
- amendment of the Swiss Collective Investment Schemes Act and the Swiss Intermediated Securities
- an amendment of the Swiss Civil Code regarding ecclesiastical and family foundations;
- an amendment of the Swiss Debt Collection and Bankruptcy Code regarding the mode of payment; and
- various amendments of the Swiss Anti-Money Laundering Act regarding, inter alia, the definition of politically exposed persons, the settlement of client orders, the freezing of assets, and the prohibition of information.
Some of the changes need to be further specified in implementing regulations, such as the Anti-Money Laundering Ordinance of the Swiss Financial Market Supervisory Authority FINMA, the Code of Conduct of the Swiss Bankers Association, and the regulations of the AML Self-Regulatory Organisations.