Switzerland plans to tighten its anti-money laundering regulations to bring them in line with international standards.

The Swiss Federal Council, the country's executive body, has formally released a proposal to reform its approach to money laundering, with a focus on the duties of lawyers, notaries and other consultants who have a role in managing companies and trusts.

Having been recognised worldwide as a tax haven, almost half of the estimated US$6.5 trillion held in Swiss banks is believed to originate from abroad. According to information revealed in the 2016 Panama Papers scandal, Swiss intermediaries had helped create more than 38,000 offshore accounts for clients over four decades.

The proposed policy update comes after recommendations were made by the international anti-money laundering watchdog, the Financial Action Task Force, a global anti-money laundering watchdog. The new policy is likely to see lawyers and other advisors who manage companies and trusts held to the same due diligence and reporting requirements as bankers.

The Federal Council has stated that bringing Switzerland into line with other nations when it comes to tackling money laundering is a key priority. The Parliament will review the proposals later this year, and if passed they will come into effect in 2021.

There will be many commentators on worldwide finance who will welcome the steps that Switzerland looks set to take. There is little doubt that the proposals may make the country less attractive to those looking to hide their wealth - or at the very least disguise its origins. The changes may well make those who have previously taken advantage of Switzerland's less rigorous approach to money laundering think long and hard before doing so again.

But these changes are also likely to have a huge effect on lawyers, advisors and financial institutions in relation to their due diligence and compliance procedures. They now face the burden of ensuring their practices and procedures meet the demands of a stringent, new Swiss anti-money laundering regime. Failure to do this could prove costly.

Read more about Anti-Money Laundering Investigations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.