The transparency register in the 4th AML directive in Switzerland

What is the legal basis of the Transparency Register in the respective Member State?

Switzerland is not a member of the EU. Therefore the Directive is not (directly) applicable. 

The following legislation deals with the subject matter of the Directive: (i) The Federal Act on Combating Money Laundering and Terrorist Financing (AMLA) and (ii) certain amendments of various federal acts, including the Swiss Code of Obligations, with a view to the revised FATF Recommendations 2012.

Is there an obligation of a UBO or shareholder to proactively provide information on the UBO to the legal entity?

There is a notification obligation applicable to shareholders upon acquisition of shares in stock corporations or limited liability companies, subject to certain thresholds and exceptions.

Is there an obligation of a legal entity to actively inquire with its shareholders/partners on the identity of the UBO(s)?

The legal entity itself or its directors, respectively, are responsible for (i) maintaining a register of UBOs and (ii) ensuring that no shareholder exercises its shareholder’s rights while violating such notification obligations.

Who is required to make filings with the Transparency Register, the legal entity or the UBO?

There is no Transparency Register and, accordingly, no filing obligations with such register. 

However, each legal entity is required to maintain a register of UBOs based on respective notifications by the shareholders.

Are there exemptions to the filing obligation?

There is no Transparency Register and, accordingly, no filing obligations with such register. 
The shareholder’s notification obligation (based on which the register of UBOs is maintained) is not applicable concerning an acquisition of shares:

  • by virtue of which the threshold of 25% of the legal entity’s capital or voting rights is not reached by the acquirer;
  • in a legal entity which is (partially) listed on a stock exchange or, pursuant to part of the doctrine, if the acquirer or any of the acquirer’s beneficial owners is listed on a stock exchange; or
  • which are organised as intermediated securities in accordance with the Intermediated Securities Act of 3 October 2008; the legal entity designates the custodian where the shares are held or recorded in the main register (custodian must be in Switzerland).

What is the due date for the initial filing with the Transparency Register?

There is no Transparency Register and, accordingly, there are no filing obligations with such register. 

However, the notification by the shareholders must be submitted to the legal entity within one month from the respective acquisition.

What are the sanctions in case of a breach of the transparency obligation?

If a shareholder fails to comply with the obligation to notify the legal entity of the UBO, such shareholder’s (i) participation rights (in particular voting rights) are suspended and (ii) only such monetary rights (in particular the right to dividends) originating after fulfilment of the obligation may be asserted. 

On 17 January 2018, the Swiss Federal Council launched the consultation (Vernehmlassung) on, inter alia, a tightening of the transparency obligations under Swiss corporate law by introducing, in addition to the above-mentioned sanctions, criminal sanctions for breaches of both (i) the shareholders’ notification obligation and (ii) the legal entities’ obligation to maintain a register of UBOs. It is expected that the proposed legislation will be deliberated in the Swiss Parliament in winter 2018/2019.

Is the Transparency Register established as a separate register or part of an existing register?

There is no Transparency Register. The register of UBO’s has to be maintained by each legal entity either as part of the (existing) shareholder register or as a separate register.