Transparency International Warns Switzerland Against Weakening Beneficial Ownership Register

Transparency International has urged Switzerland to refrain from diluting its proposed beneficial ownership register, cautioning that proposed changes could significantly weaken efforts to combat money laundering.

The anti-corruption organization specifically raised concerns over a provision known as the "presumption of correctness" clause, which would permit corporate declarations to go unverified. Transparency International warned, "In one proposed change, called 'presumption of correctness,' measures have been weakened to ensure that information submitted by companies about their beneficial owners would not have to be independently verified. It allows for the government to assume whatever information provided regarding a company’s owners is correct."

The group further highlighted another critical issue in the current draft of the law, noting that it "also allows trusts and other legal structures to escape full scrutiny." Transparency International stated, "They would not be required to disclose beneficial owners in the transparency register. This means the true owners of high-risk companies and trusts can remain hidden."

Switzerland has a history of softening financial regulations under pressure from industry lobbying, Transparency International warned, a pattern that has led to loopholes in past reform efforts. Beneficial ownership registers serve to identify individuals who ultimately own or control a company, a mechanism designed to make it more difficult to conceal illicit financial activities through complex corporate structures such as shell companies. Switzerland is in the process of drafting legislation to establish its own register, though it is not expected to be implemented before 2026.

Experts have expressed skepticism about the register’s effectiveness, particularly due to the likelihood that it will not be publicly accessible. Swiss authorities contend that restricting access is necessary to safeguard the country's position as a leading financial hub. However, Transparency International cautioned that further concessions, such as the "presumption of correctness," would significantly weaken the impact of the register. "Switzerland must not buckle under pressure from lobbyists but signal to the international community that it is taking the fight against money laundering seriously," the organization stated.

The anti-corruption group has also advocated for an extension of anti-money laundering (AML) regulations to encompass legal and financial advisors, including lawyers. However, it warned that delays in parliamentary debate could hinder these crucial reforms. "Sluggish parliamentary debate raises serious questions about the true willingness to reform," Transparency International said. "This could jeopardize these measures and undermine Switzerland’s efforts to meet global standards in the fight against corruption."

Emphasizing the stakes, Transparency International underscored that both the beneficial ownership register and the expansion of AML rules are critical for Switzerland’s standing on the international stage. "The country’s reputation as one which seeks to fight corruption depends on these commitments," the organization declared.

By fLEXI tEAM