Switzerland's government expressed "sincere regret" for failing to prevent the illegal adoption of children from Sri Lanka in the 1990s.
The issue came to light several years ago after Sri Lankan adults who had been adopted as children in the 1980s and 1990s returned to find their birth parents, only to discover that information contained in their files was sometimes false.
An investigation by the Zurich University of Applied Sciences in February found that almost 11,000 Sri Lankan children were provided to parents in various European countries in the context of an organised, often illegal, international trade.
The study also found that Swiss authorities became aware of irregularities and cases of child trafficking as early as the end of 1981 at the latest.
"Despite early and clear indications of illegal adoption placements in Sri Lanka, the Confederation waited far too long before taking the appropriate action against the irregularities,'' the Swiss government said in a statement on Monday.
"The negligence of the authorities has marked the lives of adults adopted as children to this day."
"The Federal Council regrets that the Confederation and the cantons failed to shoulder their responsibility to the children."
The government said it would provide greater financial and psychological support for adoptees searching for their origins and intended to launch a broader historical analysis of possible illegal adoptions in Switzerland.
A total of 881 adoptions were granted between 1973 and 1997 in Switzerland, with intermediaries in Sri Lanka pocketing generous fees, while the children's families received little.
The Federal Council also wants to see whether irregularities have occurred elsewhere and promises to amend the law if necessary.
Switzerland only recently acknowledged the suffering of Swiss children who were taken away mainly from poor families and single mothers and were made to work on farms as late as the 1960s.