New Delhi: Stepping up efforts to curb illicit fund flows, Switzerland plans to amend its anti-money laundering law wherein financial intermediaries will be required to verify information on beneficial owners.
The Alpine nation, known for its banking secrecy practices, has been taking various measures in the fight against black money amid intense global pressure from various countries, including India.
The Swiss Federal Council has now initiated the consultation process for amendments to the country's anti-money laundering law. As part of putting in place stringent mechanism to stymie illegal fund flows, the country plans to provision for improving the effectiveness of suspicious activity reporting for money laundering and terrorist financing.
“The law now explicitly obliged financial intermediaries to verify information on beneficial owners. This creates a basis for the existing practice and enshrines case law,” the Swiss government said.
Noting that financial intermediaries must regularly check that client data is up to date, the government said the frequency and scope of reviews is based on the degree of risk posed by the contracting party.
According to the statement, issued on June 1, due diligence obligations are to be introduced for certain services which concern the establishment, management or administration of companies and trusts.
Besides, the threshold for cash payments in precious metals and gem trading is to be reduced and an authorisation for the purchase of old precious metals is to be made compulsory, it added.
The proposed bill to amend the anti-money laundering law takes into account certain key recommendations from the Financial Action Task Force (FATF) mutual evaluation report on Switzerland based on a review conducted in 2016.
While acknowledging the generally good quality of the Swiss system for combating money laundering and terrorist financing, the report had also identified weaknesses in some areas, as per the statement. Late last year, India and Switzerland inked a pact for automatic exchange of tax-related information.
