Switzerland Tightens AML Rules With Consultancy Oversight and Beneficial Ownership Register

Switzerland has moved to strengthen its anti-money laundering (AML) regime by extending regulation to certain consultancy activities considered high risk and by creating a federal register of beneficial owners in an effort to increase transparency. Parliament has adopted amendments to the Money Laundering Act (AMLA) intended to bring the country in line with Financial Action Task Force (FATF) standards. The reform highlights how loopholes in legal and consultancy services, combined with opaque ownership structures, can be exploited to launder illicit funds, and how new legislation seeks to close those gaps.

The reform was triggered by deficiencies identified by FATF as well as concerns raised by civil society groups in Switzerland regarding the limited scope of the old AMLA. Previously, many advisory services carrying high money laundering risks—such as the formation or management of companies, trusts, or foundations, or acting as a shareholder of record on behalf of others—were not explicitly subject to AML due diligence obligations. Professions such as lawyers, notaries, trustees, and fiduciaries faced minimal requirements in terms of disclosure and reporting. This created loopholes that criminals could exploit to move illicit money through legal entities while sheltering behind professional secrecy.

In May 2024, the Federal Council introduced a package of measures that included the establishment of a federal register of beneficial owners and new due diligence requirements for legal professions and consultancy services deemed high risk. Parliament debated and amended the proposal, narrowing the scope of consultancy obligations so that only activities presenting a “concrete risk of money laundering” would be covered, rather than all forms of advisory work. The House of Representatives approved the bill by 116 to 75. Among the most contested issues were how far legal advisers should be subject to AML duties and how severe penalties for non-compliance should be.

The reform also revamps beneficial ownership transparency. Legal entities formed under Swiss law, as well as some foreign entities with strong links to Switzerland, will now be required to declare their ultimate beneficial owners in a federal register maintained by the justice and police department. The register will not be open to the public but will be accessible to authorities and financial intermediaries for due diligence purposes. The measure aligns with FATF Recommendation 24, which requires countries to maintain central registers of beneficial ownership information.

The case exposes several major AML vulnerabilities. Professional advisers who establish or manage legal structures, or who provide registered office addresses, often serve as the gatekeepers of opaque arrangements. When such roles fall outside AML regulation, criminals are able to create shell companies, trusts, or foundations, appoint nominee shareholders or directors, and obscure the real ownership of assets. Illicit funds from corruption, fraud, or other crimes can then be layered through these structures, transferred across borders, laundered through real estate, or invested in legitimate assets.

The absence of a central beneficial ownership register also created gaps. Various registers and fiduciary records were often incomplete, with owners hidden, changes in ownership not recorded promptly, and trusts or foundations falling outside strict regulation. Without centralized verification, financial intermediaries had to rely on documents provided by clients, which could be forged or incomplete.

Furthermore, when AML obligations were not applied universally to advisory professions, enforcement and deterrence were weak. Penalties for failing to identify beneficial owners or for neglecting to report suspicious transactions were at times limited or unclear, with professional secrecy used as a shield against disclosure.

The new framework addresses these weaknesses in several ways. Consultancy activities that carry a concrete money laundering risk—such as forming or managing companies or trusts, serving as nominee shareholders, providing registered addresses, or engaging in real estate transactions—are now explicitly subject to AML obligations. Those engaged in such activities must identify clients, verify beneficial ownership, understand the purpose and background of the transaction, maintain records, implement internal controls, and report suspicious transactions under the AMLA.

Legal entities under Swiss law, along with certain foreign entities with strong Swiss ties, must now declare their ultimate beneficial owners. The threshold is generally 25 percent of ownership or voting rights, or equivalent control. If no natural person meets the threshold, senior management or the highest controlling individuals will be recorded. The register, though not public, will be accessible to authorities and financial intermediaries.

The reforms are explicitly designed to satisfy FATF’s standards on beneficial ownership transparency and to address criticisms raised in earlier evaluations of Switzerland. They also strengthen enforcement, with heavier penalties for non-compliance, obligations for high-risk consultants to report suspicious transactions, and clearer guidelines on when professional secrecy must yield to the public interest in fighting financial crime. Legal entities and individuals who fail to provide or update beneficial ownership information will now face administrative liability.

Yet despite the reforms, some risks remain. Because consultancy obligations are limited only to services presenting a “concrete risk,” some advisory activities may still lie outside AML coverage. The concept of “concrete risk” is open to interpretation, and under-inclusion could leave exploitable gaps. The beneficial ownership register, while improving internal transparency, is not public, which means researchers, NGOs, journalists, or foreign banks may still face obstacles verifying ownership information. The effectiveness of the register will also depend on the accuracy and timeliness of the data submitted.

Professional secrecy remains a sensitive issue. Ensuring that lawyers and other advisers disclose information in high-risk cases or report suspicious activities may continue to face resistance. Penalties must also be sufficiently strong to deter misconduct; if sanctions remain too modest compared to potential gains from money laundering, deterrence will remain weak. Moreover, many corporate and trust structures are international, raising challenges for cross-border enforcement. Criminals may simply shift to jurisdictions with weaker AML requirements.

Compliance costs will also rise. Legal professionals and consultants will have to adapt their internal systems, train staff, strengthen risk assessments, and adopt stricter controls. Some firms may exit high-risk consultancy markets, while others could pass compliance costs on to clients.

The Swiss reform underscores how money laundering often exploits advisory roles, shell structures, opaque ownership, and professional secrecy. Illicit funds, whether from fraud, corruption, tax evasion, or organized crime, are typically funneled into companies, trusts, or properties using nominees or foundations to conceal ownership, moved through banks, and reinvested to appear legitimate. Effective AML strategy must therefore regulate non-financial professions involved in legal structuring, enforce beneficial ownership transparency through operational registers with meaningful sanctions, clearly define risk thresholds, and strike a balance between professional secrecy and reporting obligations. International coordination is equally vital, including FATF compliance, mutual evaluations, and cooperation with foreign jurisdictions.

For compliance officers and investigators, the implications are significant. Internal policies and procedures must be updated to reflect expanded obligations, particularly in consultancy and advisory roles. Systems for onboarding, monitoring, record-keeping, and training will need to adapt. Suspicious transaction reporting is likely to increase in cases involving shell companies, trusts, real estate, and consultancy services. Supervisors and auditors will closely examine whether firms properly interpret “concrete risk” and apply AML duties when required. Cross-border requests for client information will become more common, necessitating stronger documentation and coordination with foreign regulators.

Other countries can draw lessons from the Swiss case. Similar gaps exist worldwide in jurisdictions where legal structuring, real estate, or advisory services remain lightly regulated. Extending AML obligations to these professions, establishing central beneficial ownership registers, aligning with FATF standards, and ensuring that penalties and enforcement are meaningful are all steps that can strengthen defenses against financial crime. Policymakers should also ensure that ownership registers are not purely symbolic, but backed by real verification and enforceable sanctions, and that professional secrecy is carefully balanced against the need for transparency.

By fLEXI tEAM