Revision of the Anti-Money Laundering Act: The banks are ready
The Financial Action Task Force (FATF) assesses international financial centres and publishes mutual evaluation reports on countries at regular intervals. It determines whether countries are compliant in their implementation of its 40 recommendations, which include measures for the protection of the international financial system with regard to terrorist financing, the proliferation of weapons of mass destruction and money laundering. If shortcomings are identified in the national implementation of the recommendations, the FATF may prescribe a follow-up process. Since 2016, Switzerland has been undergoing the FATF’s so-called “Enhanced Follow-up Process”. However, Switzerland is not alone in facing this challenge. Other countries such as Finland and Hong Kong are also subject to this process.
The FATF found that in principle, Switzerland has a good framework of preventative measures. At the same time, however, a need for action was identified in certain areas (see Mutual Evaluation Report of Switzerland 2016). The topic is a dynamic one and periodic adjustments to international standards are therefore necessary. This presents a challenge for the Swiss financial centre.
It is now time to make these adjustments and bring them into line with the current anti-money laundering requirements. This is the only way to create the conditions required in order to exit the Enhanced Follow-Up Process.
The proposal faced obstacles
On 26 June 2019, the Federal Council adopted the dispatch on amending the AMLA as item of business 19.044. The impetus for the amendments came from the FATF. Looking back on the parliamentary process over the last several months, it is clear that great resistance had to be overcome. First, the National Council refused to address the item of business due to vehement opposition from advisors. In July 2020, the Swiss Bankers Association provided a statement on this matter at a hearing of the Legal Commission of the Council of States. The banking sector’s fundamental position here is well known: the inclusion of advisors is desirable in the interests of consistent regulation, but is not a sine qua non – especially if this would jeopardise the adoption of the proposal. The removal of advisors from the proposal resolved this impasse, and the item of business was debated in the Council of States. However, a controversial proposal for the definition of “reasonable suspicion” in Art. 9 AMLA once again gave rise to great uncertainty. Only through intensive mediation between the sector and the authorities could a viable solution finally be found. This hurdle was thus also overcome. We now wait with anticipation to see what will unfold in the National Council, as the item of business will be on the agenda on 15 December 2020.
Why the revision is necessary
Switzerland wants to continue to represent a responsible and sustainable financial centre. The prompt revision of the AMLA is a key prerequisite to this end. A rejection of the proposal after many months of intensive parliamentary debate would send out a very negative signal. Considering that the next mutual evaluation report is expected to be produced in 2022, it is even more important for everything that has been achieved to date to be brought to completion. This is the only way to keep the possibility of exiting from the Enhanced Follow-up Process intact. The banking sector is ready to implement the new rules.