Source: https://iclg.com/practice-areas/anti-money-laundering-laws-and-regulations/switzerland
Timestamp: 2019-12-07 03:57:45
Document Index: 653746758

Matched Legal Cases: ['art. 305', 'art. 186', 'art. 59', 'art. 305', 'art. 305', 'art. 138', 'art. 139', 'art. 140', 'art. 146', 'art. 158', 'art. 160', 'art. 163', 'art. 19', 'art. 322', 'art. 322', 'art. 14', 'art. 305', 'art. 23', 'art. 24', 'art. 23', 'art. 25', 'art. 305', 'art. 37', 'art. 50', 'art. 102', 'art. 102', 'art. 305', 'art. 305', 'art. 102', 'art. 97', 'art. 305', 'art. 97', 'art. 305', 'art. 98', 'art. 97', 'art. 305', 'art. 70', 'art. 70', 'art. 71', 'art. 263', 'art. 71', 'art. 53', 'art. 53', 'art. 2', 'art. 12', 'art. 2', 'art. 52', 'art. 33', 'art. 35', 'art. 9', 'art. 37', 'art. 305', 'art. 305', 'art. 102', 'art. 2', 'art. 2', 'art. 2', 'Art. 20', 'art. 7', 'art. 8', 'art. 260', 'art. 305', 'art. 260', 'art. 6', 'art. 305', 'art. 10', 'art. 17', 'art. 9', 'art. 70', 'art. 305']

Anti Money Laundering 2019 | Switzerland | ICLG
Switzerland: Anti Money Laundering 2019
The ICLG to: Anti-Money Laundering Laws and Regulations - Switzerland covers issues including criminal enforcement, regulatory and administrative enforcement and requirements for financial institutions and other designated businesses in 31 jurisdictions
ICLG.com > Practice Areas > Anti Money Laundering > Switzerland
Anti-Money Laundering Regulatory/ Administrative Requirements and Enforcement
1.1 What is the legal authority to prosecute money laundering at national level?
In accordance with art. 305bis no. 1 of the Swiss Criminal Code (SCC), any person who carries out an act that is aimed at frustrating the identification of the origin, the tracing or the forfeiture of assets which he knows or must assume originate from a felony or from a qualified tax offence, shall be punishable by imprisonment of up to three years or a monetary penalty.
The criminal offences under art. 186 of the Federal Act on Direct Federal Tax and art. 59 para. 1 first lemma of the Federal Act on the Harmonization of Direct Taxes of the Cantons and Municipalities shall be deemed to be qualified tax offences if the evaded taxes exceed CHF 300,000 per tax period. The crucial point in this instance is that, for the purpose of tax evasion, falsified, forged or substantively untrue documents are used for fraudulent purposes.
According to the Federal Supreme Court, and regardless of the clear wording of art. 305bis no. 1 SCC, the actions described as “frustrating the identification of the origin and the tracing of assets” shall not have any independent significance in comparison to “frustrating the forfeiture”.
The perpetrator of the predicate offence can also be punished for subsequent money laundering.
Money laundering is only punishable if it has been committed with direct or conditional intent.
Under Swiss law, the crime of money laundering pursuant to art. 305bis SCC protects the criminal authorities’ right to forfeiture. Thus, in order to establish money laundering the criminal authority has to prove:
(i) that a predicate offence (felony or qualified tax offence) has been committed;
(ii) that assets originating from such predicate offence could be forfeited;
(iii) that the offender intentionally committed an act aimed at frustrating the forfeiture of such assets; and
(iv) that the offender knew or should have known that the assets originate from a predicate offence.
Generally speaking, money laundering applies to felonies, i.e. criminal offences that are punished with a prison sentence of more than three years, and to qualified tax offences.
Consequently, predicate offences include, inter alia, the most important offences against property (e.g. misappropriation [art. 138 SCC], theft [art. 139 SCC], robbery [art. 140 SCC], fraud [art. 146 SCC], criminal mismanagement [art. 158 SCC], handling stolen goods [art. 160 SCC]), bankruptcy offences (art. 163 et seq. SCC), certain forms of drug dealing (art. 19 para. 2 of the Federal Act on Narcotics and Psychotropic Substances), bribery (art. 322ter et seq. SCC), including bribery of foreign public officials (art. 322septies SCC).
As for taxes, the evasion of indirect taxes (customs duties, withholding tax, stamp duties, VAT, etc.) is punished with a prison sentence up to five years and thus anyway qualifies as a felony and predicate offence to money laundering, provided the conditions of art. 14 para. 4 Federal Act on Administrative Criminal Law are fulfilled, that is if it:
(i) is committed commercially or in cooperation with third parties; and
(ii) causes a significant unlawful advantage or a significant damage to public authorities.
The evasion of direct taxes, on the other hand, does not qualify as a felony under Swiss law. However, since the beginning of 2016 money laundering still applies to so-called qualified tax offences relating to direct taxes (cf. question 1.1 above).
Among Swiss law experts there is a dispute as to whether the new offence of money laundering in tax matters is indeed functional since avoidance of taxes in principle (i) triggers no forfeiture, but just a supplementary tax assessment, and (ii) does not lead to the acquisition of specific assets which originate from the qualified tax offence and could be forfeited.
If the predicate offence, in other words the felony or the qualified tax offence, was committed abroad and is punishable there, then the perpetrator shall be prosecuted and punished in Switzerland for the money laundering committed in Switzerland (art. 305bis no. 3 SCC). This provision serves to protect the foreign forfeiture claim. Applying the provision to foreign predicate offences can therefore be problematic if a foreign state does not know the concept of forfeiture of specific (tainted) assets, but rather absorbs tortious benefits exclusively by means of a claim for compensation (see also question 1.9 in this regard).
Depending on whether the money laundering is directed against the Federation’s or the Canton’s administration of justice, criminal proceedings for money laundering are conducted either by the Federal Prosecutor’s Office or by the cantonal public prosecutor’s offices (art. 23 para. 1 lit. h of the Swiss Code of Criminal Procedure [SCP]). If money laundering is, to a large extent, carried out abroad or in several cantons without being concentrated in one canton, then the Federal Prosecutor’s Office shall be responsible for prosecution (art. 24 para. 1 SCP). However, under certain conditions the Federal Prosecutor’s Office can transfer a criminal case that falls under its jurisdiction in accordance with art. 23 SCP to the cantonal prosecutor’s offices for investigation (art. 25 SCP).
The Money Laundering Reporting Office Switzerland (MROS) similarly plays an important role in the prosecution of money laundering. It receives reports from financial intermediaries who transmit them by virtue of their reporting rights or their reporting obligation, and subsequently reviews and analyses them (see question 2.6). It notifies the relevant prosecuting authority if it has reason to suspect that money laundering has taken place or that assets originate from a felony or a qualified tax offence in accordance with art. 305bis no. 1bis SCC.
Any violations of the reporting obligation (art. 37 of the Federal Act on Combating Money Laundering and Terrorist Financing [AMLA]) are prosecuted by the Federal Department of Finance (art. 50 para. 1 of the Federal Act on the Swiss Financial Market Supervisory Authority [FINMASA]). For more details about the reporting obligation, please see question 3.9.
In Switzerland, both natural persons and companies can be prosecuted and convicted for money laundering. In accordance with art. 102 para. 1 SCC, any felony or misdemeanour committed in a company in the exercise of commercial activities in accordance with the objects of the company is attributed to the company if that act cannot be attributed to any specific natural person due to inadequate organisation of the company (subsidiary corporate liability).
In accordance with art. 102 para. 2 SCC, the company shall be punished independently or in addition to the criminal liability of any natural persons if the felony or misdemeanour involves certain offences, including in particular money laundering, and if the company has failed to take all the reasonable organisational measures in order to prevent such an offence (cumulative corporate liability).
In the event of natural persons being convicted in accordance with art. 305bis no. 1 SCC, the maximum prison sentence is three years. In qualified cases (art. 305bis no. 2 SCC), in particular, if the perpetrator is acting as a member of a criminal organisation or as a member of a group that has been formed for the purpose of the continued conduct of money laundering activities, or if he/she achieves, by means of commercial money laundering, a large turnover or a substantial profit, then the maximum prison sentence shall be five years, combined with a maximum monetary penalty of 500 daily penalty units of up to CHF 3,000 each.
If a company is convicted of money laundering, the maximum fine shall be CHF 5 million (art. 102 para. 2 in conjunction with para. 1 SCC).
The limitation period for prosecution is 10 years (art. 97 para. 1 lit. c SCC) for the basic offence of money laundering (art. 305bis no. 1 SCC) and 15 years (art. 97 para. 1 lit. b SCC) for the qualified offence (art. 305bis no. 2 SCC). As money laundering is an ongoing offence, the limitation period for prosecution begins on the day on which the criminal conduct ceases (art. 98 lit. c SCC). The limitation period for prosecution ceases to apply if a judgment by a court of first instance has been issued before the limitation period for prosecution has expired (art. 97 para. 3 SCC).
It should be noted that the limitation period for prosecution of the predicate offence also plays a role. If the predicate offence is barred by a statute of limitation, then no forfeiture or money laundering in terms of frustrating the forfeiture will be possible. The limitation period for prosecution of predicate offences (felonies and qualified tax offences) is 15 years.
There are no money laundering provisions in Switzerland on a cantonal or municipal level. Only art. 305bis SCC applies. However, criminal proceedings for money laundering are also prosecuted by the cantonal prosecutors (see question 1.4).
In accordance with art. 70 para. 1 SCC, the court orders the forfeiture of assets that have been acquired through the commission of a criminal offence, unless the assets are passed on to the person harmed for the purpose of restoring the prior lawful position.
Forfeiture shall only be precluded if a third party has acquired the assets in ignorance of the grounds for forfeiture and has (cumulatively) provided an equivalent consideration for them or if forfeiture would otherwise cause him disproportionate hardship (art. 70 para. 2 SCC).
The objects of forfeiture are assets obtained directly or indirectly by means of a criminal offence. These must have a natural and adequate causal link to the criminal offence, but do not necessarily have to be the direct and immediate consequence of the offence. For example, income from legal transactions that have been concluded based on bribery can also be confiscated. It is undisputed that surrogates of assets acquired through a criminal offence can be confiscated as well.
If the assets which are subject to forfeiture no longer exist, e.g., because they have been consumed or disposed of, then the court orders a compensation claim for the same amount (art. 71 para. 1 SCC). The compensation claim may be enforced in any assets, including assets which may have been legally acquired. Frustrating the compensation claim does not qualify as money laundering since it does not focus on “tainted” assets. Money laundering applies only to frustrating the forfeiture of “tainted” assets that are proven to be directly or indirectly derived from a felony or a qualified tax offence.
It is an issue of controversy whether the scope of the benefit to be recovered should be determined on a net or gross basis. For generally prohibited activities (e.g., drug trafficking), gross calculations apply, whereas for acts that are permitted in principle, but are only tortious in specific instances (e.g., a contract that has been obtained through corrupt means), net calculations are used, i.e. the production costs are deducted.
Law enforcement authorities may order the provisional seizure of assets if they are likely to be forfeited or serve to enforce the compensation claim (art. 263 para. 1 lit. d SCP, art. 71 para. 3 SCC).
As forfeiture and compensation claims involve objective measures and not penalties, these sanctions are applied regardless of the criminal liability or conviction of a particular person. This is on the condition, however, that all objective and subjective elements of the underlying offence can be proven and that there is no general defence.
Yes. It is worth mentioning, for example, the conviction of bank officers for money laundering by omission (BGE 136 IV 188). The relevant case was based on the following facts: the bribes received by tax officials from the District of Rio de Janeiro were transferred to accounts of a bank headquartered in Geneva. Although the question of the admissibility of a PEP engaging in secondary employment did relate to one of the officials, internal transfers to other tax officials did take place, and the accounts showed a rapid increase in capital, the evidence thus suggested that the tax officials’ balances could be of criminal origin; the bank officers neglected to inform the bank’s general management. As a result of this omission, they breached the duties of care incumbent on them and prevented the accounts from being reported to MROS and being blocked.
Another ruling of the Federal Supreme Court relates to the criminal liability of a bank for lack of organisational measures to prevent money laundering (BGE 142 IV 333). The decision was based on the following facts: After the transfer of EUR 5 million to an account at the bank – the transfer was based on fraud – the amount of CHF 4.6 million was withdrawn in cash. The Federal Supreme Court denied the bank’s cumulative liability for money laundering since the necessary conditions, i.e. the underlying criminal liability of a natural person for money laundering, was not established. The case shows that the cumulative liability of companies for money laundering is indeed cumulative and not strict liability.
Plea agreements as known, e.g., in the U.S. are not known in Switzerland. However, criminal prosecution may be abandoned in certain circumstances, in particular if the offender has made reparations (art. 53 SCC). In this regard, reference should be made to the abandoning of corruption proceedings against a French company on the basis of art. 53 SCC, after it had made reparations to the value of CHF 1 million. At the same time, however, the Swiss subsidiary of the same concern was sentenced, by means of a summary penalty order, to a fine of CHF 2.5 million as well as a claim for compensation to the value of CHF 36.4 million.
In accordance with Federal Supreme Court case law, orders for abandoning prosecutions can be inspected if there is a legitimate interest in the information and it is not opposed by any overriding public or private interests.
2. Anti-Money Laundering Regulatory/ Administrative Requirements and Enforcement
The basic principles for combatting money laundering are laid down in the Federal Act on Combating Money Laundering and Terrorist Financing (AMLA). The scope of application of the AMLA as well as the duties for the traders are clarified in the Anti-Money Laundering Ordinance of the Federal Council.
The obligations for the prudentially supervised financial intermediaries (especially banks) and those for the Swiss Financial Market Supervisory Authority FINMA subordinated financial intermediaries (DSFIs) are specified in the FINMA Anti-Money Laundering Ordinance (AMLO-FINMA). The duties of the financial intermediaries affiliated with the self-regulatory organisations are regulated in the corresponding self-regulatory organisation’s statutes. Depending on the financial intermediary, supervision is carried out by the FINMA, the self-regulatory organisations, the Federal Gaming Board, or the supervisory commission of the Swiss Bankers Association’s for its Code of Conduct with regard to the exercise of due diligence (CDB) (see questions 2.2 and 2.3). Reference is hereby made to questions 3.1 and 3.7 for the requirements related to combatting money laundering.
If the financial intermediaries pursuant to art. 2 para 3 AMLA do not submit themselves directly to FINMA supervision, they must join a recognised self-regulatory organisation and the regulations of this self-regulatory organisation shall apply. It should be mentioned that the prudentially supervised banking sector has established a Code of Conduct with regard to the exercise of due diligence with FINMA’s agreement. The Code of Conduct applies to the identification of the customer and establishing the identity of the beneficial owner of the assets involved in the business relationship or the transaction. It should also be emphasised that the statutes for self-regulatory organisations for the Swiss Insurance Association for Combating Money Laundering (SRO SVV) govern the due diligence obligations for all insurance institutions, even if they have not been subject to the supervision of the SRO SVV.
Yes. In accordance with art. 12 lit. c AMLA, supervising compliance with the due diligence obligations of the financial intermediaries mentioned in art. 2 para. 3 AMLA is the responsibility of the self-regulatory organisations recognised by FINMA, unless the financial intermediaries have directly submitted themselves to the supervision of FINMA. FINMA, in turn, actively monitors the self-regulatory organisations.
Yes, requirements are only at national level.
FINMA is responsible for monitoring FINMA’s direct and prudentially supervised financial intermediaries (especially the banks). The self-regulatory organisations are responsible for enforcing the requirements vis-à-vis their affiliated financial intermediaries. It should be emphasised that the banks, in addition to FINMA, are also supervised by their professional organisation’s supervisory committee.
FINMA publishes the procedure in connection with auditing in the context of circulars, as well as various information on so-called “enforcement proceedings”.
The Money Laundering Reporting Office Switzerland (MROS) at the Federal Office of Police is the national central office which examines suspicious transaction reports, analyses them and, if necessary, forwards them to the relevant law enforcement authorities.
By virtue of art. 52 FINMASA, the prosecution of any violations of this law and of the financial market laws has a limitation period for prosecutions of seven years.
Self-regulatory organisations do not have a homogeneous fine policy and the fines vary in terms of amount. The Swiss Bankers Association’s Supervisory Commission may, for example, issue penalties of up to CHF 10 million. The offences that can lead to fines or penalties are specified in the corresponding regulations. FINMA itself does not have any authority to issue fines.
Violating the due diligence obligations of the AMLA may call into question the “guarantee of proper business conduct” demanded by the financial intermediary. If FINMA detects a serious violation of supervisory provisions, it may, in accordance with art. 33 FINMASA, prohibit the person responsible from acting in a management capacity towards any person or entity subject to its supervision. The prohibition from practising a profession may be imposed for a period of up to five years.
Authorisation to exercise financial intermediary activity may be withdrawn from companies. In addition, FINMA may, by virtue of art. 35 FINMASA, confiscate any profit that a supervised person or entity or a responsible person in a management position has made through a serious violation of the supervisory provisions.
If the reporting obligation specified in art. 9 AMLA is violated, then natural persons can be prosecuted in accordance with art. 37 AMLA (intentional violation: fines of up to CHF 500,000; negligence: fines of up to CHF 150,000).
Furthermore, a natural person can be punished for money laundering under art. 305bis SCC, although the grounds for this offence can also be met by omission (imprisonment for up to three years or a fine, in severe cases imprisonment for up to five years). In addition, there is a specific offence for the financial intermediaries which fail to determine the identity of the beneficial owner of the assets with the due diligence required by the circumstances (art. 305ter para. 1 SCC, imprisonment for up to one year or a fine).
In addition, art. 102 para. 2 SCC is to be mentioned, which, in the context of a money laundering offence, stipulates that the company will also be punished if it has not taken all necessary and reasonable organisational measures to prevent an offence of this nature (see question 1.5).
As a rule, FINMA does not comment on individual enforcement proceedings. Cases of particular regulatory interest are exceptions to this rule. Many self-regulatory organisations do not make decisions on penalties public. There are in some cases reports in which information is provided in a summarised and anonymised form on the practice of penalties. Financial intermediaries have already challenged decisions on penalties.
The AMLA and the due diligence obligations that it contains apply, on the one hand, to financial intermediaries (art. 2 para. 2 and 3 AMLA) and, on the other hand, to traders (art. 2 para. 1 lit. b AMLA), who receive more than CHF 100,000 in cash. The term financial intermediaries specifically includes banks, insurance companies, fund management companies and investment companies (the latter both under certain conditions), securities dealers and casinos. In addition, persons are also considered to be financial intermediaries if they professionally lend, provide payment services, or manage assets.
Please refer to question 3.7 for a description of the due diligence obligations.
The Swiss Financial Market Supervisory Authority FINMA assesses the Money Laundering risks as especially high in a decentralised blockchain-based system, where assets can be transferred anonymously and without regulated intermediaries.
In February 2018, FINMA published guidelines regarding Initial Coin Offerings (ICOs). Based on these guidelines, FINMA focuses on the economic function and purpose of the token issued by the ICO organiser. Relevant is the underlying purpose of the token and if they are tradeable or transferable. FINMA distinguishes between payment tokens, utility tokens and asset tokens. If the ICO issues already existing payment tokens, it is qualified as a means of payment and subjected to the AMLA. Either the ICO organiser affiliates itself to an SRO or is licensed directly by the FINMA and fulfils the AMLA-obligations itself (e.g. identifying the contracting party) or these requirements can be fulfilled – exceptionally – through “delegation”, by having the funds accepted via a financial intermediary, which is already subject to the AMLA and who exercises the corresponding customer due diligences for the ICO organiser.
The ICO of utility tokens or asset tokens are not qualified as means of payment under the AMLA and therefore not subjected to the AMLA.
Under current FINMA practice, the exchange of a cryptocurrency for fiat money or a different cryptocurrency falls under art. 2 para. 3 AMLA. The custodian wallet provider, the online exchange office and the centralised trading platform are subject to the AMLA as well.
Furthermore it has to be noted that in September 2018, the Swiss Bankers Association published guidelines for its members regarding opening corporate accounts for blockchain companies.
AMLO-FINMA sets specific requirements for certain types of financial intermediaries. Art. 20 para. 2 AMLO-FINMA should be mentioned, for example, which stipulates that banks and securities dealers must operate a computer-based system for monitoring transactions. Such system will help to identify transactions with increased risks.
All documents required in connection with the fulfilment of the due diligence obligations must be kept for 10 years after the business relationship in question has been terminated or the transaction has been carried out (art. 7 para. 3 AMLA). There is no obligation, however, to automatically report large currency transactions.
There are at present no automatic reporting requirements in Switzerland for any transactions.
There is no obligation to automatically report cross-border transactions.
Identifying the contracting party: A financial intermediary must identify the contracting party on the basis of a valid document (e.g. passport or extract from the commercial register) when commencing a business relationship.
Establishing the identity of the beneficial owner of the assets: In the case of natural persons, the financial intermediary must determine whether there are any doubts about the principle that the contracting party is also the beneficial owner of the assets. Since 01/01/2016, financial intermediaries must also identify the controlling person of legal entities. The controlling person is always a natural person.
Repetition of the verification of the identity of the customer or the establishment of the identity of the beneficial owner in the event of doubt.
Special duties of due diligence: The financial intermediary shall also be required to identify the nature and purpose of the business relationship that the contracting party wishes to establish. The scope of the information to be obtained depends on the (money laundering) risk represented by the contractual partner or the planned business relationship or transaction (referred to as “risk-based approach”). In addition, the contractual partner must be investigated for (but not exclusively) his/her status as a politically exposed person, but also for any matches on sanction and terrorist lists.
Documentation and retention obligations: Documentation must be created concerning the transaction carried out and concerning the clarification required in accordance with the AMLA and be retained for at least 10 years after the business relationship has come to an end.
Obligations in the event of suspected money laundering: In the event of a reasonable suspicion of money laundering or terrorist financing, the financial intermediary must provide a report to the Money Laundering Reporting Office and, if necessary, take further measures (e.g. an asset freeze and information ban).
In accordance with art. 8 lit. b AMLO-FINMA, the financial intermediary may not start any business relationships with banks of this nature unless they are part of a consolidated group of financial institutions that is appropriately monitored in a consolidated fashion.
A financial intermediary must immediately notify the Money Laundering Reporting Office if it knows, or has reasonable grounds to suspect, that the assets involved in the business relationship are related to a criminal offence under art. 260ter number 1 (criminal organisation) or art. 305bis SCC (money laundering), are the proceeds of a felony or a qualified tax offence, are subject to the power of disposal of a criminal organisation or serve the financing of terrorism (art. 260quinquies para. 1 SCC). Furthermore, the financial intermediary shall have a duty to report if it cancels negotiations for commencing a business relationship based on a reasonable suspicion of this nature. Finally, the financial intermediary shall also be required to report if the financial intermediary, in accordance with the provisions of art. 6 para. 2 lit. d AMLA knows or has reason to believe that the data forwarded by FINMA, the Federal Gaming Board or a self-regulatory organisation concerning the so-called terrorist lists correspond to the data of the customer, a beneficial owner or the authorised signatory of a business relationship or transaction.
In addition, the financial intermediaries shall be entitled to report any observations to MROS that suggest assets are the result of a felony or a qualified tax offence (art. 305ter para. 2 SCC).
Currently there is no publicly accessible register that contains information about the beneficial owners of an operating legal entity who ultimately control the legal entity. However, there is a commercial obligation to keep a register of bearer shareholders and beneficial owners of the bearer and nominal shares.
Yes. Based on art. 10 of the AMLO-FINMA, the payer’s financial intermediary for the payment order must state the name, the account number, and the address of the payer as well as the beneficiary’s name and the account number. There are certain easements for payment orders within Switzerland.
Bearer shares are not prohibited in Switzerland. However, there are efforts to abolish the bearer shares. Furthermore, the acquisition must be reported within one month, by providing personal details and identifying the bearer shareholder. In addition, the beneficial owner of the shares must be notified if the limit of 25% of the share or voting interest is reached or exceeded. If the shareholder has not met its reporting obligations, then its membership rights shall be suspended. Furthermore, its property rights will be forfeited if the notification is not made within one month of the acquisition having taken place. If the bearer shareholder collects the notification at a later date, it may only assert the property rights arising from that date.
No. However, if a trader carries out a transaction of CHF 100,000 in cash, it must then comply with the limited due diligence and reporting obligations under art. 17 et seq. of the Anti-Money Laundering Ordinance of the Federal Council.
Due to the fact that Switzerland narrowly failed the FATF country evaluation in 2016 and is in the so-called enhanced follow-up, a duty on the part of the financial intermediary to verify the customer’s information on the beneficial owner and an event-independent obligation for the regular updating of the customer documentation shall be introduced. In addition, discussions are underway to lower the threshold for the reporting obligation, so that the financial intermediaries will, in future, have to report in the event of mere simple suspicion on the basis of art. 9 AMLA. In June 2018, the Federal Council of Switzerland published a legislative draft amending the AMLA. The scope of the AMLA should be extended and due diligence obligations are to be introduced for certain services which concern the establishment, management or administration of companies and trusts (except operating companies in Switzerland). This amendment especially focuses on lawyers and notaries and will apply the AMLA duties (in amended form) as well to them. Furthermore, associations which are at risk of being misused for terrorism or money laundering must be entered in the commercial register. When these legislative amendments will enter into force and what will be the final wording of the legislative text is not yet clear.
See question 4.3.
On 7 December 2016, the fourth FATF Country Report for Switzerland was published. Switzerland scored well for the legal mechanisms. Switzerland was rated as “compliant” or “largely compliant” for 31 of the 40 recommendations. With regard to the effectiveness of the legal provisions, Switzerland scored high in seven out of the 11 subject areas examined. Switzerland achieved above-average results in comparison to the other countries that have already been audited.
However, this does not change the fact that Switzerland did fail the country evaluation, like many other countries. This is especially the case because, according to the FATF, Switzerland’s efforts in connection with establishing the identity of the beneficial owner and especially with verifying this information have been insufficient to date. There is, therefore, a need for action in the area of technical compliance, in other words primarily at the level of the AMLA and the regulations and rules issued by the SRO. It is expected that a duty to verify the information on the beneficial owner as well as a regular and event-independent obligation to update customer information will be introduced. The relevant revisions are under consideration or already in progress (see question 4.1 above).
We refer to the following links:
Federal Department of Foreign Affairs FDFA – Fighting money laundering and terrorist financing: https://www. eda.admin.ch/eda/en/home/foreign-policy/financial-centre-economy/fighting-international-crime.html.
Money Laundering Reporting Office Switzerland (MROS): https://www.fedpol.admin.ch/fedpol/en/home/kriminalitaet/geldwaescherei.html.
Swiss Criminal Code, SCC (cf. in particular art. 70 et seq. and art. 305bis SCC): https://www.admin.ch/opc/en/classified-compilation/1937 0083/index.html.
Anti-Money Laundering Act, AMLA: https://www.admin. ch/opc/en/classified-compilation/1997 0427/index.html.
The authors would like to acknowledge Florian Baumann, Responsible Partner, for his contribution to this chapter. Florian is head of the Kellerhals Carrard White Collar Crime practice group and represents clients in multinational asset recovery cases, criminal and administrative legal assistance proceedings and internal investigations. He advises banks and other financial intermediaries on compliance issues, including representation in administrative investigations or compliance-related litigation.
Kellerhals Carrard Zürich KlG