Swiss lawmakers are attempting to weaken several government proposals aimed at preventing financial crimes. They argue that Switzerland needs to maintain competitiveness in global cross-border wealth management as rivals like Singapore and the UAE continue to rise.

A forecast by Boston Consulting Group shows that Switzerland is currently the world's largest wealth management center but could lose this position as early as this year.

Following former U.S. President Donald Trump's imposition of 39% import tariffs on Switzerland, the country's focus on competitiveness has significantly increased, with lawmakers eager to find ways to boost the domestic economy.

These lawmakers claim that Switzerland needs to slow the pace of anti-money laundering implementation for competitiveness reasons. This rationale has also been used in other areas, such as discussions about proposed new capital rules for Switzerland's largest bank, UBS Group AG.

The Swiss government's anti-money laundering bill aims to implement requirements from the international financial regulatory body, the Financial Action Task Force (FATF), which calls for countries to fully disclose shell company information.

Barbara Steinemann, a federal lawmaker from the right-wing Swiss People's Party, told sources that for years, whenever Switzerland faces external pressure on financial transparency, it dutifully implements relevant regulations, which not only increases administrative burden but also weakens competitiveness, while other financial centers hold back in this regard.

"This is about competition between financial centers, about the fight for economic interests," she said. "The United States and other European countries all want to steal our business."

In 2024, Switzerland implemented the Organisation for Economic Co-operation and Development's required 15% minimum tax rate for large multinational corporations; this year, Switzerland implemented the final Basel III banking standards ahead of other major financial centers.

However, lawmakers have opposed stricter regulations in the government bill aimed at preventing rogue lawyers, trustees and other advisors from assisting money laundering, calling these restrictions both unnecessary and burdensome.

Simone Gianini from the center-right Free Democratic Party stated that transparency measures must never lead to over-regulation.

The Free Democratic Party, Swiss People's Party, and centrist Center Party together hold a majority in parliament, and these three parties had previously rejected an anti-money laundering bill in 2020.

In June this year, Center Party lawmaker Beat Rieder stated in parliament: "The laws we pass are implemented down to every detail." He believes Switzerland's existing anti-money laundering system is more comprehensive than systems in other financial centers.

To reduce burdens on U.S. businesses, the Trump administration this year relaxed enforcement of a decades-old anti-foreign bribery law.

The U.S. Treasury Department has not yet responded to requests for comment.

Competitive Pressure

In June this year, the Swiss parliament excluded charities and other non-profit organizations from the proposed beneficial ownership transparency registry. The Swiss government stated that this move could make it difficult for Switzerland to fulfill its commitments to combat money laundering and terrorist financing.

Lawmakers also exempted trust arrangements from reporting obligations in the registry. Swiss Finance Minister Karin Keller-Sutter pointed out that trust arrangements are extremely vulnerable to criminal use because these mechanisms can conceal client identities.

The Swiss parliament's upper house weakened new due diligence obligations for advisors, exempting some lawyers from compliance with related safeguards. Keller-Sutter stated that these amendments significantly reduced the scope of lawyers required to fulfill this obligation.

Since both houses of parliament have agreed on exemption clauses, the transparency registry exemption provisions have officially taken effect. The Swiss parliament's lower house will review the government's proposed advisor due diligence rules this week to determine their scope of application.

When asked about parliament's relevant decisions, the Swiss Finance Ministry stated that for financial centers and business hubs with international influence, an effective system to combat financial crimes is crucial for reputation and development.

For years, Switzerland has faced pressure to disclose more bank account holder information, which ultimately led to the end of Swiss banking secrecy and exposed Switzerland to more intense competition from other wealth management centers.

Boston Consulting Group data shows that in 2024, all major global financial centers achieved cross-border wealth growth rates (by percentage) exceeding Switzerland's, with Singapore leading at 11.9% cross-border wealth growth.

According to Boston Consulting Group forecasts, Hong Kong will become the world's leading cross-border wealth booking center in 2025.

However, Switzerland still maintains secrecy mechanisms in some areas. In the Global Financial Secrecy Index compiled by the UK non-profit Tax Justice Network, Switzerland currently ranks second only to the United States.

Anton Broennimann, head of Switzerland's financial crime department, stated that Switzerland must never become attractive to criminals due to competitiveness considerations.

"Even though some countries currently have no relevant obligations in this area, we still support stricter regulations for high-risk businesses in the financial advisory industry," he said.