By Mark Baber
May 29 – The Legal Affairs Commission of the lower house of the Swiss parliament has proposed a draft law which, if passed by the legislature, will impose stricter rules against money laundering.
A new rule would specifically include the officials of sporting federations (international sports governing bodies based in Switzerland – including UEFA and FIFA – and the International Olympic Committee) in an expended definition of ‘politically exposed persons’ (PEPs) with regards to whom the banks will have to perform exceptional diligence.
The draft was agreed by the Commission by a 17 votes to 6, at their meeting May 26-27, with the section expanding the definition of PEPs to sporting bodies passed by 17-7. The Commission largely adopts the formulations agreed in the Swiss Senate in March, which themselves followed the recommendations of the Groupe d’action financière (GAFI) made in 2012. The measures are likely to be debated in the lower house in September.
The measures to be adopted include a CHF 100,000 (€81,900) limit on cash payments for most purchase contracts (with auctions, land purchases and purchases of chattels excluded).
Tax fraud in excess of CHF 300,000, for two consecutive accounting periods, will be treated as a predicate offense for money laundering where the offender has falsified documents.
Those who purchase bearer shares amounting to 25% of share capital or voting rights will no longer benefit from anonymity although this will not apply if the company has less than CHF 250,000 capital. In the case of limited liability companies, this limit will be at CHF 50,000.
For politically exposed persons (PEPs) banks will have to perform increased due diligence. The concept of PEPs will be expanded to include people in Switzerland, including members of the international sports associations who perform executive functions.
Whilst there has been debate in Switzerland over the extent to which the country should tackle money laundering and tax evasion, there appears to be a general agreement that international requirements need to be met, although there has been a reluctance to go too far in fear of jeopardising Switzerland’s position as one of the world’s leading off-shore financial centres.
In response to the new proposed measures, FIFA stated in an email to Bloomberg: “FIFA has repeatedly said that it supports government measures to protect the integrity of the sport and the fight against corruption.”
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