Transparency International wants Switzerland to do more about shell companies

The report blames Swiss financial institutions for turning a blind eye to suspicious transactions in the Brazilian Petrobras bribery scandal Keystone

Switzerland is lagging behind in the fight against the abuse of anonymity provided by companies and trusts, which is often used to commit financial crimes. That is the conclusion of Transparency International in a report published on Thursday. 

The report placed Switzerland in the second-highest category of “strong framework” among the 23 countries assessed by the anti-corruption NGO. Only four countries – France, Italy, the UK and Spain – made it to the highest or “very strong framework” category when it comes to identifying and verifying beneficial ownership of companies. 

Switzerland does well in the areas of risk assessment, information acquisition by companies and cooperation between authorities, the report notes. On the other hand, it lags in other areas, such as a lack of a centralised register of beneficial owners of legal entities. 

Switzerland is also the only country that does not require financial institutions to verify beneficial owner information with a valid ID. Money laundering through real estate was also cited as a problem for the Alpine nation because “real estate agents are only required to conduct due diligence and identify the beneficial owner if they accept more than CHF100,000 in cash in the course of a commercial transaction”. 

Transparency International also considers that the scope of the Swiss Anti-Money Laundering Act is too narrow. The NGO wants the law to also apply to certain activities carried out by lawyers, notaries, trustees, real estate agents and dealers of artworks and luxury goods that can easily be used for money laundering purposes.