October 2021 / Switzerland

Switzerland has exchanged information on more than 3.3 million financial accounts with 96 countries within the framework of the global standard on the automatic exchange of information, the Swiss Federal Tax Administration said in an October 11 release.

Bern, 11.10.2021 — The Federal Tax Administration (FTA) has exchanged information on financial accounts with 96 countries. The exchange took place within the framework of the global standard on the automatic exchange of information (AEOI).

This year, the AEOI involved a total of 96 countries. Antigua and Barbuda, Azerbaijan, Dominica, Ghana, Lebanon, Macau, Pakistan, Qatar, Samoa and Vauatu were added to the existing list of 86 countries. With 70 countries, the exchange of information was reciprocal. In the case of 26 countries, Switzerland received information but did not provide any, either because those countries do not yet meet the international requirements on confidentiality and data security (14) or because they chose not to receive data (12). Currently, around 8,500 reporting financial institutions (banks, trusts, insurers, etc.) are registered with the FTA. These institutions collected the data and transferred it to the FTA. The FTA sent information on around 3.3 million financial accounts to the partner states and received information on around 2.1 financial accounts from them. The FTA cannot provide any information on the amount of financial assets. Switzerland has committed itself to adopting the global standard for the international automatic exchange of information in tax matters. The legal basis for the implementation of the AEOI in Switzerland came into force on 1 January 2017. Identification, account and financial information is exchanged, including name, address, country of residence and tax identification number, as well information concerning the reporting financial institution, account balance and capital income. The exchanged information allows the cantonal tax authorities to verify whether taxpayers have correctly declared their financial accounts abroad in their tax returns. The OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) reviews the implementation of the AEOI.

Today, the Federal Department of Finance (FDF) published the second "Report on the national evaluation of the risks of money laundering and terrorist financing in Switzerland" by the interdepartmental coordinating group on combating money laundering and the financing of terrorism (CGMF). The report describes the evolution in these risks since the first such report was published in 2015. It also provides an overview of the legislative provisions that have been implemented in this period with a view to improving the Swiss toolkit for combating money laundering and terrorist financing. In addition, since 2017, the FDF has published a number of sectoral reports by the CGMF in this regard.

The report concludes that the considerable risk of money laundering to which Switzerland is exposed has not changed fundamentally since 2015. Because its financial centre is so interconnected internationally, the main risk to Switzerland lies in it being misused to launder assets derived from predicate offences committed abroad. In this regard, the major international money laundering cases of recent years have partly changed Switzerland's measurement of risk. If anything, they have confirmed the conclusions of the 2015 report by illustrating the magnitude of the threat from foreign corruption, but also the complexity of the suspected money laundering incidents, the large sums involved and the vulnerability of financial intermediaries engaging in international financial transactions.

Despite the continuity that emerges from the comparison of the risks identified in more recent years and the assessment of the situation in 2015, there are three particular areas in which risk has changed since 2015: online casinos, which have been authorised in Switzerland only since 2019; terrorist financing; and crypto assets, whose rapid growth and rising popularity have brought new risks.

The regulatory and legislative toolkit for combating money laundering and terrorist financing has been improved since 2015, with the aim of eliminating the shortcomings and vulnerabilities identified. The Swiss authorities will continue to prioritise effective systems for money laundering and combating terrorist financing, and continuously review these systems in order to identify potential areas for improvement.

Second national report on risks of money laundering and terrorist financing (in German)

According to a press release of 1 November 2021, published by the Swiss Federal Social Insurance Office, the Switzerland - United Kingdom Social Security Coordination Agreement (2021) applies provisionally from 1 November 2021. The agreement will enter into force after all necessary domestic ratification procedures for the entry into force have been met in both contracting states. For more information on the provisional application, see article 73 of the Switzerland - United Kingdom Social Security Coordination Agreement (2021). The new agreement coordinates the social security systems of the two states as the European Union - Switzerland Free Movement of Persons Agreement (1999) is no longer applicable in relations between Switzerland and the United Kingdom following Brexit.