Swiss government has prepared draft regulations intended to stop individuals depositing untaxed funds in Swiss bank accounts or other financial instruments.
The federal finance ministry announced plans for new ‘enhanced due diligence’ requirements in a consultation document published in February this year. The draft code has now been written to take into account criticism from the banking sector and others, and will be published in full in the new year.
The Federal Council wants to prevent banks and other financial intermediaries from accepting untaxed assets with enhanced due diligence requirements.
In its meeting on December 14, 2012, the Federal Council instructed the Federal Department of Finance (FDF) to submit a corresponding consultation draft at the start of 2013. The content of the consultation draft and its schedule should be in line with the implementation of the revised FATF Recommendations. At the same time, the Federal Council took note of the FDF's appointment of a group of experts which is to draw up the basis for the longer-term orientation of the financial market strategy.
The Federal Council is stepping up its efforts to combat abuses in the area of money laundering and taxation. With the planned implementation of the revised recommendations of the Financial Action Task Force (FATF), serious tax offences will be qualified as predicate offences for money laundering in future. In the event that they suspect money laundering, financial intermediaries should also report these cases to the Money Laundering Reporting Office Switzerland.
Within the scope of the due diligence requirements to prevent the acceptance of untaxed assets, it is envisaged that the financial intermediary will be able to request a self-declaration from clients on the fulfilment of their tax obligations. The self-declaration will serve as an indicator of the tax-compliant conduct of the client. However, there is no self-declaration obligation.
However, the proposals will not require banks to obtain undertakings from all clients that their assets are properly taxed. Instead, each bank will apply due diligence procedures it considers appropriate to the money laundering risk posed by each individual client. Banks can devise their own codes of practice for this purpose, though they will have to comply with overall regulations set by the supervisory authority FINMA.
Financial institutions will beauthorised to request a self-declaration from clients on their tax compliance, but there will be no obligation on clients.
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