Why is money laundering an important crime in Switzerland?

Switzerland is one of the world's leading financial centers in banking, asset management, mutual funds, insurance, financial intermediation, fintech, crypto asset services, international trade, and corporate structuring. Cities such as Zurich, Geneva, Basel, Lausanne, and Zug are considered strong financial and trade centers not only for Swiss companies but also for investors with connections to Europe, the Middle East, Turkey, Asia, and America. Therefore, money laundering in Switzerland is a critical issue not only from a criminal law perspective but also from the perspectives of corporate law, banking law, financial compliance, tax law, sanctions law, and international trade.

Money laundering refers to transactions aimed at concealing the source of criminal assets, hiding the true owner, injecting criminal proceeds into the legitimate economic system, or presenting illegally obtained money as legitimate income. This process can sometimes be carried out directly through bank accounts, and sometimes through companies, trust structures, consulting agreements, real estate purchases, cryptocurrency transfers, commercial invoices, or third-party intermediaries.

Switzerland's financial system's reliability has necessitated strict anti-money laundering regulations. The advantages of being a financial center also increase the risk of illegal funds being introduced into the system. A company opening a bank account, making investments, receiving asset management services, conducting real estate transactions, or engaging in international trade in Switzerland could all face anti-money laundering regulations.

Therefore, companies operating in Switzerland or conducting transactions with Swiss connections should not interpret money laundering as merely "laundering the proceeds of crime" in a narrow sense. The real risk is that the company may inadvertently facilitate the circulation of criminal proceeds, fail to identify the true beneficiary, fail to investigate unusual transfers, fail to report suspicious transactions, or fail to establish an internal compliance system.

The Legal Framework of Money Laundering Crimes

In Switzerland, the fight against money laundering proceeds along two main axes. The first is the criminal law dimension. Individuals who conceal assets obtained through crime, hide their source, or obstruct the tracing of criminal proceeds may face criminal liability. The second axis is the financial market and compliance dimension. Banks, financial intermediaries, portfolio managers, trustees, payment service providers, crypto asset services, and certain consulting activities are subject to specific due diligence, investigation, documentation, and reporting obligations.

This dual structure is crucial for companies. A company doesn't necessarily have to be a direct owner of the proceeds of money laundering to be at risk. Liability risk arises if the company facilitates the transportation, concealment, transformation, or disguising of criminal proceeds as legitimate business transactions. This risk is particularly serious for board members, directors, finance directors, accountants, compliance officers, and actual decision-makers.

The aim of anti-money laundering legislation is not only to punish the perpetrator. It also aims to protect the reliability of the financial system, prevent criminal proceeds from entering the economic system, prevent the financing of terrorism, and prevent the abuse of corporate structures. Therefore, in Switzerland, combating money laundering has become a part of the daily operations of companies.

Stages of Money Laundering

The money laundering process is generally described in three stages: insertion, decontamination, and integration.

During the integration phase, the money or assets obtained through crime are attempted to be introduced into the financial system. This can be done by depositing cash into a bank account, conducting currency transactions, converting it into cryptocurrency, disguising it as a commercial payment, or transferring it as capital/debt to a company account.

During the dismantling phase, complex transactions are carried out to conceal the source of the funds. Funds may be transferred to different bank accounts, different countries, different companies, or different investment vehicles. Consulting invoices, license payments, intergroup debts, commission agreements, fraudulent business relationships, or cryptocurrency wallet transactions can be used at this stage.

During the integration phase, the proceeds of crime are presented as if they have been channeled into the legal economy. This could manifest as real estate purchases, acquisition of company shares, luxury consumption, investment funds, capital increases, art acquisitions, or the appearance of legitimate commercial profits.

For companies, the most dangerous area is often the unbundling and integration phase. This is because proceeds of crime are often concealed through companies, contracts, invoices, and international trade transactions. Therefore, companies need to pay attention not only to whether they have received payment, but also to the economic justification for the payment, the identity of the counterparty, the actual beneficiary, the transaction volume, the authenticity of the contractual relationship, and the source of the funds.

Money Laundering Risk for Companies

In Switzerland, the risk of money laundering for companies can manifest in many different ways. A company might receive unexplained high-value transfers to its account. The company might display a surprisingly high transaction volume that is inconsistent with its actual activity. A newly established company might experience large inflows and outflows of funds in a short period. The price of a commercial contract might be unusually high or low compared to market conditions. A company partner, manager, or client might be a person with political influence. The company might frequently conduct transactions with high-risk countries. The true beneficiary might be hidden within complex corporate structures.

In such cases, the company executives' defense of "we only conducted a commercial transaction" may not always be sufficient. Suspicion of money laundering may arise, especially if the transaction defies economic logic, the documents do not reflect the truth, the identity of the counterparty is unclear, the payment comes from third parties, or there is an inconsistency between the company's business activities and the money movements.

The most common risk areas faced by companies include: fraudulent consulting agreements, fictitious commission payments, money transfers through shell companies, unexplained debt-receivable transactions between related companies, high-value real estate investments, crypto asset transfers, price manipulation in export-import invoices, luxury goods trading, art and precious metal transactions, agreements with offshore companies, and investor inflows with unknown beneficiaries.

Identifying the True Beneficiary

In Switzerland, one of the most important concepts in the fight against money laundering is the beneficial owner. The beneficial owner is the ultimate economic interest holder behind a company, account, asset, or transaction. The official shareholder of a company might be another company. The shareholder of that company might be another entity in another country. And behind these entities, there might be a real person. Identifying this ultimate person is necessary for a proper analysis of money laundering risk.

Identifying the beneficial owner is not merely a matter of filling out a technical form for companies. The company's name, the source of capital, decision-making mechanisms, control relationships, and economic interest structure must all be examined together. Holding companies, trusts, offshore companies, family businesses, nominee shareholders, and indirect shareholding relationships can particularly complicate the identification of the beneficial owner.

Incomplete or inaccurate information about the actual beneficiary can have serious consequences for companies. Bank account opening may be refused. Existing banking relationships may be terminated. Suspicious transactions may be reported. Administrative action may be initiated against the financial intermediary or advisor. The company may suffer a loss of trust in the investment or trading process. In more severe cases, a criminal investigation may be initiated.

Therefore, individuals establishing companies in Switzerland, acquiring companies, opening bank accounts in Switzerland, or conducting international transactions through Switzerland must establish the true beneficiary structure correctly from the outset. Company agreements, share registers, partnership documents, control relationships, and ownership of economic benefits must be clearly defined.

New Transparency Rules and Their Impact on Companies

One of the most notable recent developments in Switzerland's fight against money laundering is the transparency regulations concerning the beneficial owners of legal entities. These regulations aim to more effectively identify, register, and make accessible to the relevant authorities the true beneficiaries behind companies.

This development represents a significant transformation for companies. A shareholder structure that only appears in the commercial register may no longer suffice. Companies need to accurately identify ultimate controllers, economic stakeholders, and indirect ownership relationships. This increases the compliance burden, particularly for multi-layered corporate structures, foreign partnerships, holding companies, family businesses, investment vehicles, and international group companies.

Companies must keep their internal records up-to-date, monitor shareholder changes, collect declarations of beneficial owners, make necessary updates when there are changes in the ownership structure, and have information readily available that may be requested by the competent authorities. Otherwise, not only the company's commercial reputation but also its legal security may be harmed.

The impact of transparency rules on companies is not limited to registration obligations. Banks and financial intermediaries will also scrutinize the ownership and control structure of their clients in more detail. Therefore, opening a company's bank account, applying for a loan, making an investment, processing a purchase, or international transfers may require more detailed documentation and explanation.

Responsibilities of Financial Intermediaries

In Switzerland, banks, securities firms, portfolio managers, trustees, payment service providers, money transfer companies, some cryptocurrency service providers, and non-bank financial intermediaries are subject to obligations under anti-money laundering legislation. These obligations primarily involve knowing the customer, identifying the beneficial owner, understanding the purpose of a transaction, investigating unusual transactions, conducting further investigations into high-risk relationships, maintaining records, and reporting suspicious transactions.

A financial intermediary cannot simply obtain the client's identity. They must assess the source of the money the client is using, its business purpose, economic rationale, and risk level. If the transaction appears unusual or raises suspicion of proceeds from crime, the financial intermediary must investigate the client's economic background and, if the suspicion cannot be dispelled, report it to the relevant authorities.

At this point, the documents that companies present to their financial intermediaries must be consistent and clear. There must be consistency between the company's business activity, invoices, contracts, payments, bank transactions, and sources of capital. For example, a newly established consulting firm receiving millions of francs in international transfers in a short period of time, but without any actual service output or reasonable contract, naturally creates a risky appearance.

Consulting Activities and New Risk Areas

In the fight against money laundering, not only traditional financial intermediaries but also certain high-risk consulting activities are gaining importance. Company formation, restructuring of company structure, real estate transactions, establishment of trusts or similar structures, shareholder structure planning, facilitating asset transfers, and legal/financial restructuring services can constitute risky areas in terms of money laundering.

This situation should be carefully considered by lawyers, financial advisors, tax advisors, company formation advisors, real estate advisors, and investment advisors. Not every advisory activity automatically falls under anti-money laundering regulations; however, compliance obligations may arise in certain high-risk transactions where the advisor is not merely a technical service provider but plays an active role in the movement of assets or the establishment of the company structure.

For example, a consultant could pose a serious risk if they set up a company in Switzerland on behalf of a foreign investor whose true beneficiary is unclear, assist with opening a bank account, plan a real estate purchase, and conduct transactions without disclosing the source of the funds. Similarly, establishing complex company structures without commercial justification or making arrangements to conceal the true controller can also lead to legal liability.

Company Executives' Criminal and Compliance Liability

For company executives, the risk of money laundering is not limited solely to transactions conducted on behalf of the company. Board members, directors, de facto managers, finance directors, and compliance officers are responsible for establishing the necessary organization to prevent money laundering risks for the company. In companies lacking a compliance system, with unclear payment approval processes, no customer onboarding policy, no legitimate beneficiary control, and no reporting of suspicious transactions, executives may also face liability risk.

A company director's liability may arise particularly in the following cases: knowingly authorizing transactions with risky clients, accepting forged or incomplete documents, failing to investigate the purpose of a transaction, failing to question the economic justification for high-value money transfers, concealing the true beneficiary despite knowing them, avoiding reporting suspicious transactions, or failing to train employees on the risks of money laundering.

Therefore, compliance systems for Swiss-linked companies should not be considered solely for large banks or financial institutions. Trading companies, consulting firms, real estate companies, crypto asset startups, investment companies, family offices, and international holding companies should also establish risk-based compliance mechanisms appropriate to their fields of activity.

Corporate Criminal Liability

In modern economic crimes, companies can often be used as tools or a pretext for committing the crime. In Switzerland, corporate criminal liability may arise, particularly in cases where the crime could not be prevented due to organizational deficiencies, the perpetrator could not be identified, or illegal actions were taken within the scope of the company's activities.

In money laundering cases, a company's responsibility is assessed particularly through deficiencies in internal controls. If a company has not established a mechanism to monitor risky transactions, if payment approvals are uncontrolled, if there is no customer onboarding process, if genuine beneficiary declarations are not obtained, if employees are not trained, and if there is no suspicious transaction reporting system, then the company's organizational shortcomings become questionable.

The consequences for companies may not be limited to fines or administrative sanctions. They may also face severed banking relationships, difficulty accessing financing, problems with licensing or permit processes, loss of investor confidence, contract termination, exclusion from public tenders, and significant reputational damage. In a financial center like Switzerland, where reputation is paramount, even suspicion of money laundering can severely impact a company's business operations.

Crypto Assets and Fintech Companies

Switzerland, particularly the Zug region, stands out in terms of crypto assets and blockchain projects. However, the cross-border, fast, and sometimes anonymous nature of crypto assets increases the risk of money laundering. Crypto exchanges, wallet services, token issuing companies, payment systems, decentralized finance projects, and digital asset custody services must be carefully evaluated in terms of money laundering regulations.

The most significant risks in the crypto space include unverified customer identity, unknown true beneficiary, transactions with high-risk wallet addresses, connections to individuals on sanctions lists, introduction of crypto assets obtained through crime into the system, and inability to explain the source of funds.

If a fintech or crypto company wants to operate in Switzerland, it must assess whether the service it offers qualifies as financial intermediation, whether it requires licensing or membership in a self-regulatory body, how the know-your-customer procedure will be implemented, and how the transaction monitoring system will be established. In the crypto asset sector, simply claiming to be a "tech company" may not be sufficient for transactions that qualify as financial intermediation.

Suspicious Transaction Reporting and MROS

In Switzerland, reporting suspicious transactions is a crucial mechanism in the fight against money laundering. If a financial intermediary, after conducting an investigation, cannot dispel suspicions of money laundering regarding a transaction or business relationship, then a reporting obligation arises. These reports are made to the Money Laundering Reporting Office Switzerland (MROS).

Reporting suspicious transactions is a sensitive issue for companies. The reporting process, including whether the customer relationship will continue, whether accounts will be blocked, and the management of document retention, confidentiality, and internal reporting procedures, must be carefully considered. Failure to report suspicious transactions can lead to serious legal consequences. However, not every unusual transaction automatically constitutes a crime. Therefore, the financial intermediary must investigate the economic background, review the documents, and file their findings.

For companies, the correct approach is to conduct transactions transparently and with proper documentation from the outset. The risk of suspicion decreases if the transaction exists only on paper, with reasonable pricing, a clear contract, verified identity and authorization documents of the parties, a clear reason for payment, and a proper invoice and delivery relationship. However, the risk increases if the transaction only appears to exist on paper, if the payment is detached from economic reality, or if the identities of the parties are unclear.

How should a compliance program be established for companies?

Swiss-linked companies need to establish a risk-based compliance program to mitigate the risk of money laundering. This program may vary depending on the company's size, industry, customer profile, transaction volume, and the countries in which it operates. However, the basic elements are similar.

First, a customer identification procedure must be established. The company must know who it is doing business with, whether the counterparty is legitimate, the representative's authorization, and who the actual beneficiary is. Second, the purpose of the transaction and the source of funds should be evaluated. Additional documentation should be requested, especially for high-value, unusual, third-party payment, or high-risk country-related transactions.

Third, an internal approval mechanism must be established. Risky customers or transactions should not be accepted solely on the decision of a single sales representative. Evaluation should be conducted by management, finance, and compliance units. Fourth, employee training should be provided. Accounting, sales, finance, and management staff should recognize signs of money laundering. Fifth, a record-keeping system should be established. Identity documents, contracts, invoices, bank statements, declarations of the actual beneficiary, and risk assessments should be regularly maintained.

Sixth, sanctions and PEP (Process Information and Evaluation) controls should be implemented. Politically influential individuals, sanctions lists, high-risk countries, and negative media records should be considered. Seventh, an internal reporting mechanism for suspicious transactions should be established. Employees should know who to report suspicious transactions to.

Swiss-Related Risks for Turkish Companies

Turkish companies may wish to open a bank account in Switzerland, conduct business with Swiss companies, establish a company in Switzerland, receive investment, acquire real estate, or receive international payments through Switzerland. In such cases, Turkish companies need to consider Switzerland's anti-money laundering standards.

One of the most common risks for Turkish companies is the inadequate preparation of documentation regarding the source of funds and the actual beneficiary. A Turkish company wishing to open a bank account in Switzerland may be required to provide information on its ownership structure, business documents, tax records, financial statements, contracts, information on the actual beneficiary, and explanations regarding the source of the funds. Inconsistencies or omissions in these documents can complicate the process.

Furthermore, in Turkish-Swiss trade relations, payments from third countries, currency transfers, inter-group company debts, consulting invoices, and high-value commissions must be carefully structured. The authenticity of the commercial relationship, the basis of the invoice, whether the service was actually provided, and to whom the payment belongs must be demonstrated with documentation.

Defense and Company Stance in Money Laundering Investigation

When a company or executive faces suspicion of money laundering in Switzerland, the first step is to properly analyze the transaction chain and documentation. Where did the money come from? What contract is it based on? Who is the actual beneficiary? What is the company's economic benefit from this transaction? Is the transaction compatible with the company's normal business activities? Who is the counterparty? What do the company executives know about the transaction?

From a defense standpoint, not every complex financial transaction can be considered a crime. International trade, intra-group financing, investment structuring, tax planning, share transfers, consulting services, or crypto asset transfers may be legitimate. However, the economic and legal justification for these transactions must be clearly demonstrated. Lack of documentation, contradictory statements, or documents that appear to have been subsequently prepared can weaken the defense.

The company's approach during the investigation process is also crucial. This includes preserving documents, conducting internal reviews, obtaining statements from relevant employees, identifying compliance deficiencies, conducting independent audits if necessary, and communicating appropriately with the relevant authorities. Hasty statements, document deletions, or attempts to create manipulated statements among employees can worsen the company's situation.

Conclusion

In Switzerland, money laundering and its impact on companies is one of the most important areas where criminal law and financial compliance law intersect. Switzerland's status as a strong financial center means strict oversight and a high standard of compliance for companies, banks, financial intermediaries, advisors, fintech startups, crypto asset service providers, and international investors.

For companies, the risk of money laundering is not limited solely to directly laundering criminal proceeds. Failure to identify the true beneficiary, failure to investigate unusual money transfers, use of fraudulent or economically unfounded contracts, failure to vet high-risk customers, failure to report suspicious transactions, and failure to establish compliance systems can also lead to serious liability.

Companies operating in or conducting transactions linked to Switzerland must effectively implement customer identification, beneficial owner identification, fund source investigation, transaction monitoring, document retention, enforcement control, employee training, and suspicious transaction reporting mechanisms. In particular, new transparency and beneficial owner regulations, effective October 1, 2026, will require companies to make their ownership and control structures more transparent and documented.

Therefore, compliance with anti-money laundering regulations in Switzerland is essential not only to avoid the risk of penalties, but also to protect banking relationships, ensure investor confidence, strengthen corporate reputation, and make international business operations sustainable. A properly established compliance system protects a company not only from legal sanctions, but also from the risk of reputational damage and commercial exclusion.