Money laundering regulations continue to tighten across Europe

Money laundering regulations continue to tighten across Europe

Switzerland has drafted new rules to tighten money laundering regulations, holding lawyers, consultants and banks more accountable for reporting, scrutinizing and controlling risks, setting a higher standard for the rest of Europe.

Swiss banks make it the world’s biggest manager of offshore wealth and their government has drafted new rules that will be presented in parliament in 2024 following consultation, with the aim of fighting old perceptions that it is a hot destination for criminals to stash ill-gotten gains.

They have received international pressure to provide more insight into corporate ownership where companies and entities like trusts cloak the identity of real beneficiaries and if the rules are accepted, those who manage such businesses or clients will be subject to due diligence rules and reporting obligations.

In an attempt to fight money-laundering via shell companies, the Swiss government also outlined plans to create a central registry which would track who actually owns legal entities, detailing company owners while giving the finance ministry power to impose sanctions.

The news follows increased global attention regarding financial crime as other European countries tightening their approach and implement measures to improve regulation.

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Dr Henry Balani, Global Head of Industry & Regulatory Affairs for Encompass Corporation, commented: “The continuing global attention on financial crime and sanctions has forced regulators to up their game with regards to money laundering regulation, with Switzerland the latest example to level up its economic crime agenda. We’ve seen in the UK, for example, the introduction of the Economic Crime Bill as a direct result of public pressure against Russian Oligarchs, sparking a closer inquiry into ownership structures and it’s important that this approach spreads through to European countries to bolster the response to economic crime, with regulation a key component.

“As part of the fight against financial crime, organisations themselves should embrace technology for robust Know Your Customer (KYC) processes, which ensure compliance and detect financial criminals faster. Utilising dynamic KYC process automation, for example, is crucial to navigating complex ownership structures to identify beneficial owners, enabling businesses and regulators to take collaborative action to truly tackle financial crime.”

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