Will Switzerland Join the United Kingdom’s Dirty Money Task Force?

At the end of August 2023, Switzerland announced that they would be proposing new rules that would toughen anti-money laundering laws in response to claims by the United States who said that their sanction enforcements were weak. Indeed, the United States went further by saying that Switzerland had not done enough to crack down on the movement of dirty money.

To this end, Switzerland produced a proposal which included a “Federal Register” in which companies, corporations and other legal entities would find it harder for criminals and similar associates to hide assets from investigating authorities, and would have to disclose the names of any beneficial owners. However, much to the annoyance of the United States, the register would not be made public.

Previous to 2023, Switzerland had slowly been moving away from original traditions where bank secrecy was protected which at the time had made it the banking centre for the world’s rich. However, much criticism still emanated from the United States and a number of other countries as it was felt not enough had been done plus the enforcement of sanctions on Russia after the invasion of Ukraine seemed patchy at best.

Furthermore, at that time, Switzerland was also unwilling to join a multilateral task force designed to improve cooperation on seizing sanctioned Russian assets. However, as of Tuesday 19th August, it was announced that Switzerland is considering joining a British-led international task force, the IACC (International Anti-Corruption Coordination Centre), which targets “Kleptocrats*” in order to recover stolen assets.

*Kleptocrats/Kleptocracy – translated means “Rule by Thieves” and it is where corrupt government leaders systematically utilise their political power for criminal gain whereby they steal wealth and resources from their nation. This crime takes place on a massive scale which involves huge corruption that depletes a nation’s budget, hinders public services and economic development, and ultimately undermines democratic governance. Kleptocrats often hide their mass of stolen wealth in other countries which requires a transnational network of financial and legal enablers to obscure ownership and launder money, a problem that host countries together with the international community are continuing to struggle to combat.

Indeed, experts in this arena advise that sources close to officials confirm that Switzerland currently has observer status with IACC and during a visit earlier this month by the British Foreign Secretary David Lammy he discussed the possibility of the country participating further with the IACC and the possibility of becoming a full member. As a result, Switzerland is considering a number of options for future cooperation with the IACC but definite decisions have yet to be reached.

Joining the task force would enable Switzerland to share intelligence and work more closely with countries on investigations that target dirty money. The British Foreign Secretary has advised that Switzerland has been a key partner in the fight against corruption and illicit finance and further participation with the IACC would be invaluable. Since the illegal invasion of Ukraine by Russia on 24th February 2022, Britain has increased its efforts against illicit finance and has become the global leader against kleptocracy.