Federal Council initiates process for drafting of bill on central beneficial owners registry
At its meeting last Wednesday, the Federal Council instructed the Federal Department of Finance (FDF) to draft a bill by the end of June 2023 to increase transparency and facilitate the identification of beneficial owners of Swiss registered legal entities.
The aim is to strengthen the prevention and prosecution of financial crime and thus the integrity and reputation of the financial centre and the economy.
This follows the observation recently made by the Federal Council that the measures taken so far in the area of transparency and identification of beneficial owners of legal entities could be improved. The draft bill should introduce a central register for the identification of beneficial owners, as well as new obligations to update information about them, based on risks. This register would only be accessible to the Swiss competent authorities, not to the general public.
If this reform is adopted, this would be a major change to the current legislation. Currently, every legal entity incorporated in Switzerland has to hold a register of shareholders and beneficial owners, keep it updated and make sure it is accessible at any time in Switzerland. Such register is part of the corporate documents of the company and is not accessible to the authorities except to the authorities in charge of enforcing anti-money laundering legislation. Which authorities are included in the terms "competent authorities" and in what situations they will be granted the right to access the register will be points of particular interest when the draft bill is made public.
The Federal Council is also asking the FDF to include measures to strengthen the existing anti-money laundering system. In particular, it will be necessary to determine whether further changes are required to the current system, for example with regard to legal professions.
This bill is part of an international context where a growing number of countries around the world, including all members of the European Union, are relying on central registers to increase the transparency of legal entities. The Federal Council's intent is to align with the international developments in this area and notably to respond to the recommendation made to Switzerland by the Global Forum on Transparency and Exchange of Information for Tax Purposes to further improve the transparency of beneficial owners of legal entities.