Swiss lawmakers push back on anti-money laundering law over competitiveness concerns

By Ariane Luthi

ZURICH (Reuters) -Swiss lawmakers are seeking to water down government proposals to help prevent financial crime, saying the country needs to stay competitive in global cross-border wealth management where rival centres - including Singapore and the UAE - are gaining ground.

Switzerland is currently the world's largest wealth management hub, but could lose that crown as early as this year, according to a forecast from Boston Consulting Group.

The focus on Swiss competitiveness has intensified since the country was hit with a 39% U.S. import tariff by President Donald Trump, making lawmakers keen to find ways to strengthen the country's economy.

The lawmakers say Switzerland needs to slow down its anti-money laundering drive on competitive grounds, an argument also used in other areas, including in the debate over proposed new capital rules for UBS, Switzerland's biggest bank.

The Swiss government's anti-money laundering legislation seeks to implement requirements by the Financial Action Task Force, an international finance watchdog, which has called for countries to come clean on shell companies.

Barbara Steinemann, a federal lawmaker for the right‑wing Swiss People's Party, told Reuters that for years, whenever there was foreign pressure on financial transparency, Switzerland dutifully implemented rules, driving up bureaucracy and eroding competitiveness, even as other financial centres held back.

"This is about a war between financial centres and economic interests," she said. "The Americans and other European countries would like to take over our business."

Switzerland in 2024 implemented the OECD's minimum 15% tax rate for large multinationals and final Basel III banking standards this year, ahead of other major financial centres.

But lawmakers are pushing back against the tougher rules in the government's legislation designed to prevent rogue lawyers, trustees or other advisers facilitating money laundering, describing the curbs as unnecessary and burdensome.

The transparency drive must not lead to over-regulation, said Simone Gianini of the centre-right Liberals.

The Liberals, the Swiss People's Party and centrist party The Centre, which together hold a majority in parliament, rejected an anti-money laundering bill back in 2020.

"When we pass laws, they are implemented down to the last detail," The Centre party lawmaker Beat Rieder told parliament in June, suggesting that Switzerland already has a more sophisticated system to combat money laundering than other financial centres.

Aiming to reduce burdens on U.S. companies, the Trump administration this year adopted a scaled down approach to enforcement of a decades-old law outlawing foreign bribery.

The U.S. Treasury Department did not reply to a request for comment.

COMPETITION

In June, the Swiss parliament excluded charities and other non-profit groups from a planned transparency register to show beneficial owners, a step the government has said would jeopardise Swiss commitments to combat money laundering and terrorism financing.

Lawmakers also exempted trust arrangements from the register, schemes, which Finance Minister Karin Keller-Sutter has said are particularly prone to crime as they can be used to conceal a client's identity.

Parliament's upper house has diluted new due diligence obligations for advisers, exempting some lawyers from implementing these safeguards. Keller-Sutter has said the amendments have significantly reduced the scope of those lawyers covered by the obligations.

The exemptions from the transparency register are final as both houses of parliament have agreed on them. The lower house is due to debate the government's proposed due diligence rules for advisers this week to determine their scope. 

The finance ministry, when asked for comment on the parliamentary decisions, said that an effective system for combating financial crime was essential for the reputation and success of an internationally significant financial centre and business location.

Switzerland was under pressure for years to disclose more information about bank account holders, which ultimately led to the end of Swiss bank secrecy which exposed the country to increased competition from other wealth management centres.

Every major financial center in 2024 grew more rapidly in percentage terms of cross-border wealth than Switzerland, according to the Boston Consulting Group. Singapore topped the list with 11.9% growth in cross-border wealth.

Hong Kong is set to become the world's leading booking centre for cross-border wealth in 2025, based on BCG's forecast.

But secrecy still exists in some areas and Switzerland currently ranks second after the United States on a list of the world's top financial secrecy enablers compiled by the Tax Justice Network, a British non-profit.

Anton Broennimann, who heads the country's financial crime unit, said Switzerland must ensure it does not become attractive to criminals due to competitive considerations.

"We would welcome stricter rules for high-risk activities in the financial advisory sector even if some other countries currently have no obligations in this area," he told Reuters.

(Reporting by Ariane LuthiEditing by Dave Graham and Jane Merriman)