Swiss Lawmakers Resist Stronger Anti-Money Laundering Push to Protect Competitiveness

Swiss legislators have rejected the government’s proposed anti-money laundering law, framing their opposition as a bid to preserve the nation’s standing in global wealth management.

Lawmakers argued that tightening regulations would undermine Switzerland’s appeal at a time when rival financial centers such as Singapore and the United Arab Emirates are rapidly expanding their market share.

The move comes against the backdrop of concerns that Switzerland could soon lose its position as the world’s largest wealth management hub. According to Boston Consulting Group, the country risks being overtaken as early as this year. The heightened focus on competitiveness intensified after the Trump administration imposed tariffs of 39%, which, according to officials, forced Swiss policymakers to search for strategies to reinforce the economy against the impact of U.S. trade policies.

Transparency Versus Competitiveness

The government has insisted that the new anti-money laundering rules are necessary to meet international standards. Specifically, the legislation would incorporate requirements from the Financial Action Task Force (FATF), which calls on jurisdictions to increase transparency around shell companies. Yet lawmakers have pushed back, insisting that the reforms would add costs, create bureaucracy, and weaken the country’s competitive edge.

Officials in Bern stated in August that they intended to “decisively press ahead” with their economic policy program, prioritizing reductions in regulatory burdens for Swiss companies. Legislators, however, used the same competitiveness arguments they had previously deployed when resisting new capital requirements for UBS, the nation’s largest bank.

Barbara Steinemann, a member of the Swiss People’s Party, criticized the government’s approach, arguing that Switzerland often adopts new rules only when pressured by foreign actors. “This is about a war between financial centers and economic interests. The Americans and other European countries would like to take over our business,” Steinemann declared. She maintained that additional transparency obligations merely “drive up bureaucracy and erode competitiveness,” while rival hubs hold back.

The government has already implemented the OECD’s global minimum corporate tax of 15% for large companies and finalized the Basel III banking standards this year. Lawmakers have also taken issue with proposed legislation aimed at preventing misconduct by lawyers, calling the measures both “unnecessary” and “burdensome.”

Exemptions and Rollbacks

Swiss politician Simone Giannini warned that the push for transparency must not cross into overregulation, a sentiment echoed by both the Swiss People’s Party and the centrist party, The Center. These two parties had already resisted a similar anti-money laundering bill five years ago.

In June, the government agreed to exclude non-profit organizations, including charities, from a planned transparency register meant to reveal beneficial owners. Trust arrangements were also excluded from the registry, despite Finance Minister Karin Keller-Sutter’s warning that such structures are “prone to crime” and “can be used to conceal a client’s identity.”

Parliament went further by reducing due diligence obligations for financial advisors, thereby exempting certain lawyers from compliance. Keller-Sutter expressed concern over the changes, noting that the amendments significantly weakened the scope of those advisors covered under the rules.

Competitive Pressure

The Boston Consulting Group noted that all other major financial centers expanded faster than Switzerland in 2024, at least in percentage terms. Singapore registered nearly 12% growth in cross-border wealth, while BCG projects Hong Kong will overtake Switzerland by 2025 to become the world’s top booking center for cross-border assets.

Despite this competitive pressure, international watchdogs continue to flag risks associated with Swiss secrecy. The Tax Justice Network, a British non-profit, currently ranks Switzerland as the world’s second-largest enabler of financial secrecy, behind only the United States.

Anton Broennimann, head of Switzerland’s financial crime unit, cautioned that the country must ensure competitiveness does not make it a haven for illicit actors. He welcomed stricter oversight of high-risk activities in the financial advisory sector, even if other jurisdictions impose no such obligations. “The country must prevent itself from becoming attractive to criminals due to competitive considerations,” Broennimann said.

By fLEXI tEAM