October 2022 / Switzerland

During its meeting on 12 October 2022, the Federal Council instructed the Federal Department of Finance (FDF) to draft a bill on increased transparency and easier identification of the beneficial owners of legal entities by the second quarter of 2023. In this way, it wishes to strengthen prevention and prosecution in the area of financial crime, and in turn the integrity and reputation of Switzerland as a financial centre and business location.

In December 2021, in a status report to the Council of States Economic Affairs and Taxation Committee (EATC-S), the Federal Council observed that there was room for improvement in the measures taken to date with regard to the transparency and identification of the beneficial owners of legal entities. The Federal Council has now instructed the FDF, in collaboration with the Federal Department of Justice and Police (FDJP), to draft a bill by the end of June 2023 at the latest, aimed at increasing transparency and simplifying the identification of the beneficial owners of legal entities. In particular, the bill should introduce a central register for identifying beneficial owners and new obligations are regards the risk-based updating of information on effective ownership. The register will be accessible to the relevant authorities but not publicly available. The aim is to achieve a solution which is as effective and efficient as possible.

Moreover, the FDF should incorporate measures to strengthen the current mechanisms for combating money laundering into the bill. In particular, it should be assessed, together with the relevant stakeholders, whether further adjustments should be made to the anti-money laundering toolkit, for instance in the area of legal professions.

By launching this bill, the Federal Council is also taking account of international developments. A growing number of countries around the world – including all EU member states – are turning to register-based solutions to increase the transparency of legal entities. In March 2020, the Financial Action Task Force (FATF) approved the revised Guidance on Transparency and Beneficial Ownership. Implementation in all member countries will be assessed as part of the next mutual evaluation. In addition, the Global Forum on Transparency and Exchange of Information in Tax Matters had already issued recommendations to Switzerland in 2020 on how to further improve transparency regarding the beneficial owners of legal entities.

The Federal Council places great emphasis on combating financial crime and this bill is a further step towards reinforcing the Swiss mechanisms in this regard. At the same time, it is implementing a measure in the Federal Council's anti-corruption strategy for 2021 to 2024.

Source: The Federal Council

On 22 September 2022, the Swiss State Secretariat for International Finance published an updated list of participating jurisdictions under the Automatic Exchange of Information CRS (AEOI-CRS) based on the OECD Automatic Exchange of Financial Account Information Agreement (2014).

The full list of countries can be found here.

For the twelfth time in a row, Switzerland is the most innovative economy in the world. This is according to the Global Innovation Index, which lists the country’s greatest strengths as its economic policy and patents. Its biggest weakness is the flow of direct foreign investments.

Switzerland is the most innovative economy in the world again in 2022. This is the result of the Global Innovation Index (GII) published on September 29, which is created every year by the World Intellectual Property Organization (WIPO) based in Geneva. This is the 15th year it has been released, with the USA in second place followed by Sweden, the United Kingdom, and the Netherlands. Germany gained two places versus last year to reach eighth place.

The index measures innovation using criteria such as institutes, human capital and research, infrastructure, investments, adaptation and dissemination of knowledge, and creative performance. According to the country report for Switzerland, its GDP performance is above expectations. The balance is positive with regard to the conversion of innovation investments into innovation output as well.

From Switzerland, the report’s list of innovative top performers names Roche in eighth place, Novartis in 18th, and Nestlé in 96th. These companies are also the top three in the intangible asset intensity category. Furthermore, the top three companies by global market value come from Switzerland: Nestlé, UBS, and Roche.

Switzerland’s strongest criteria, i.e. those for which it stands in first to third place, include its economic conditions, number of patents and patent families, expenditure on software, entertainment and media market, high-tech manufacturing, and the complexity of production and exports. Switzerland’s biggest weaknesses comprise the criteria of direct foreign investments (131st place), high-tech imports (109th), and diversification of the domestic industry (69th).

According to a press release, one of the main findings of the most recent GII is that while investments have “surged” over the past few years, there is “continued underperformance in innovation-driven productivity”. WIPO Director General Daren Tang stated: “This is why we need to pay more attention to not just investing in innovation, but how it translates into economic and social impact. Quality and value will become as critical to success as quantity and scale.”

  Source: Switzerland Global Enterprise