Swiss must improve fight against money laundering – UN expert
06 Oct 2017

KYC360 News

Switzerland has taken “significant” steps to improve the detection of suspicious transactions, however it needs to improve its efforts to combat financial crime, a UN expert said ahead of a comprehensive report to be presented early next year.

Juan Pablo Bohoslavsky, the UN Independent Expert on foreign debt and human rights, said that further efforts are necessary to ensure that dirty money stemming from tax evasion and corruption is not entering the Swiss financial market.

“Despite significant efforts in adopting legislation and improving procedures to detect suspicious transactions, the risk that the Swiss financial market is used for money laundering remains,” said Bohoslavsky.

“This is particularly highlighted by the involvement of several Swiss banks in the Petrobas corruption scandal and in the suspicious cash flows linked to the Malaysian sovereign fund 1MDB. It is especially troubling that these events are not from years ago – the money was still being accepted until quite recently.”

Bohoslavsky also pointed out Switzerland’s relatively ‘weak’ penalties for those who assist foreigners to evade taxes and its favourable tax arrangements which can incentivise profit-shifting.

“I call upon the Swiss authorities to carry out a social and human rights impact assessment of the proposed corporate tax reform package, which should include an analysis of how the reforms will impact on tax revenues available for the realization of economic and social rights within Switzerland and for individuals living abroad, in particular in developing countries,” he said.

Bohoslavsky, who visited the country at the invitation of the Swiss authorities, met with state officials as well as with banking leaders and civil society.

His findings and recommendations will be presented in a report to the Geneva-based Human Rights Council next year.

Swiss regulator FINMA declined to comment, but pointed that Switzerland is regularly ‘and in detail’ evaluated by the Financial Action Task Force regarding its system for combating money laundering and terrorist financing.

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