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New Swiss money laundering law to increase scrutiny of sports chiefs, politicians

Out-Law News | 16 Dec 2014 | 2:48 pm | 1 min. read

A bill passed by Swiss lawmakers to strengthen money laundering laws will also subject public figures in the country, such as the leaders of Swiss-based international sports bodies, to increased financial scrutiny.

Politicians and officials of international organisations based in Switzerland will be among those deemed to be ‘politically exposed persons’ (PEPs), under the bill that has been sent to Switzerland’s government to be written into law.

The bill also introduces a cap of 100,000 Swiss francs (CHF) ($104,000) on cash transactions, Swissinfo.ch reported.

Reuters said prominent figures such as the president of soccer’s world governing body the Federation Internationale de Football Association (FIFA), Sepp Blatter, and the president of the International Olympic Committee, Thomas Bach, will be among those regarded as PEPs under the new Swiss legislation.

According to Swissinfo.ch, members of Switzerland’s House of Representatives or the Senate will in future also be considered as PEPs “just like senior foreign political figures or senior officials of sports associations that are active worldwide”.

Professor of economic law and comparative law at the University of Bern Peter Kunz told Swissinfo.ch the bill would bring Switzerland into line with the requirements of the Organisation for Economic Co-operation and Development’s Global Forum on Transparency and Exchange of Information for Tax Purposes.

The Financial Action Task Force (FATF), an inter-governmental organisation set up in 1989 to combat money laundering, terrorist financing and threats to the integrity of the international financial system, defines a PEP (34-page / 957 KB PDF) as “an individual who is or has been entrusted with a prominent public function... due to their position and influence, it is recognised that many PEPs are in positions that potentially can be abused for the purpose of committing money laundering offences and related predicate offences”.

"The increasing transparency demanded across business as evidenced by these changes make clear that no sector gains exemption," said sports law expert Trevor Watkins of Pinsent Masons, the law firm behind Out-Law.com. "For sport, the demands for integrity, openness and good governance are very much underpin changes we are seeing made in the way sport organises itself. As one of the world's leading sports bodies, FIFA will unsurprisingly find itself in the spotlight and, irrespective of the political dynamics of the organisation, changes to the law such as this will be far more likely to lead to continuing changes to the way in which such bodies are governed."

"This development underlines the growing importance of sport, and especially football, in society and the power of those in high ranking positions," said regulatory sports law specialist Julian Diaz-Rainey of Pinsent Masons. "The new laws considerably increase financial scrutiny on organisations such as FIFA, which has come in for sustained criticism on ethical issues in recent years. It is to be hoped that they will lead to greater transparency all round, which can only be beneficial for the sporting industry."