Swiss lawmakers have recently moved to dilute government proposals aimed at strengthening the country’s anti-money laundering (AML) laws, specifically those targeting lawyers and the use of shell companies for financial crime prevention. The driving argument behind this pushback is a concern that overly stringent AML regulations could undermine Switzerland’s status as a leading global wealth management hub and affect its competitive edge compared to rival financial centers such as Singapore and the United Arab Emirates (UAE).
Background on Swiss AML Law and Recent Reforms
Switzerland’s AML framework, primarily governed by the Anti-Money Laundering Act (AMLA) along with various ordinances and overseen by the Swiss Financial Market Supervisory Authority (FINMA), has long been under international scrutiny for not fully covering certain advisory professions like lawyers, notaries, and tax specialists. These professionals are often involved in setting up and managing complex legal and financial structures, including shell companies, which can be exploited to obscure illicit flows of money.
The government had proposed extending AML due diligence duties to cover these “advisors,” requiring them to perform the same levels of customer verification and suspicious activity reporting currently mandatory for financial intermediaries. This would include lawyers involved in company and trust creation, management, and administration services. The intention was to close loopholes that allowed criminal proceeds to be laundered through layers of shell corporations combined with banking secrecy and lawyer-client confidentiality privileges.
A key element in these reform proposals was the establishment of a central beneficial ownership register accessible to regulators, law enforcement, and authorized financial sector professionals, enhancing transparency around the real owners behind Swiss-registered entities. Such transparency measures align with international standards from the Financial Action Task Force (FATF).
Parliamentary Pushback: Competitiveness Concerns
Despite government and regulatory support, Swiss parliamentarians have pushed back, aiming to water down the provisions relating to lawyers and shell companies. Lawmakers argue that imposing strict AML obligations on lawyers acting in advisory roles could disrupt longstanding legal professional privileges and make Switzerland less attractive as a business and financial center. They express concerns that the country risks losing business to competing financial hubs, particularly as centers like Singapore and the UAE aggressively court cross-border wealth with more business-friendly regulatory regimes.
Switzerland currently holds the title as the world’s largest wealth management hub, but forecasts by Boston Consulting Group suggest it could lose this position soon due to rising competition and tighter regulations. The specter of economic challenges has increased since the country faced a 39% import tariff by the U.S. government, adding pressure on lawmakers to safeguard the Swiss economy.
Against this backdrop, some MPs contend that overly burdensome AML rules could deter legal professionals from offering their services within Switzerland, pushing wealthy clients and financial flows elsewhere and effectively weakening the financial center’s competitiveness and growth.
Stakeholder Perspectives and Legal Profession Resistance
The lawyer lobby in Switzerland has strongly resisted attempts to broaden AML due diligence duties to encompass advisory activities, asserting that the legal professional privilege and attorney-client confidentiality are foundational rights essential for the rule of law and democracy. Many lawyers maintain that they already comply with AML laws when acting as financial intermediaries but should not face additional obligations in their pure advisory capacities. The fear is that such obligations would require lawyers to report suspicious client activities, compromising confidentiality and potentially making Swiss legal services less attractive.
Anti-corruption experts, by contrast, warn that allowing this special status for lawyers undermines Switzerland’s efforts to maintain a reputable financial system and combat financial crime effectively. They argue that the loopholes enable organized criminals to exploit the legal shield to create veils of secrecy using shell companies, impairing the international fight against money laundering, terrorist financing, and corruption.
International Context and Criticism
Switzerland has faced consistent criticism from global watchdogs such as FATF for weaknesses in its AML framework. Attempts to include advisory professions under AML oversight have been ongoing since the mid-2000s, only to encounter fierce resistance from domestic interests. The 2023 reforms, which introduced plans for a central beneficial ownership register and extended duties to certain advisors, represented meaningful progress but have been blunted by recent parliamentary decisions.
This tension between protecting legal privilege and fulfilling international AML obligations reflects broader challenges faced worldwide in designing effective anti-money laundering regimes while respecting fundamental rights. Other countries have similarly grappled with balancing these issues, but many have moved toward more inclusive AML coverage of professionals involved in the creation and management of opaque corporate structures.
AML Editor’s article was originally published in amlintelligence on September 11, 2025