The fight against money laundering
Over the past few decades, Switzerland has built up an intricate apparatus to combat money laundering and terrorist financing. It now has strict regulation in place in this respect. It rigorously implements the international standards of the Financial Action Task Force (FATF) and the Global Forum and plays an active role in these international bodies.
Switzerland’s apparatus for the fight against money laundering
The Swiss apparatus for combating money laundering is constantly being expanded and updated. It currently includes provisions in the Swiss Criminal Code (Arts 305bis and 305ter SCC) as well as the Federal Act on Combating Money Laundering and Terrorist Financing and its Ordinance (AMLA and AMLO), the Swiss Financial Market Supervisory Authority FINMA’s Ordinance on Combating Money Laundering and Terrorist Financing in the Financial Sector (AMLO-FINMA), a number of FINMA circulars with relevance for banks, and the Swiss banks’ code of conduct with regard to the exercise of due diligence (CDB) issued by the Swiss Bankers Association.
Switzerland also implements the 40 recommendations on combating money laundering and terrorist financing published by the Financial Action Task Force (FATF), and its compliance with these is regularly assessed through mutual evaluations.
The CDB was introduced in 1977 and sets out banks’ duties with regard to identifying the contracting partner and establishing the identity of the controlling person or beneficial owner. It also prohibits active assistance in the flight of capital and tax evasion. In these respects, the CDB is at the centre of Switzerland’s pioneering efforts to combat money laundering.
The material provisions of the CDB (Arts 1-57 CDB 20) have the same status as an ordinance due to a reference in Art. 35 AMLO-FINMA and thus apply to all financial intermediaries as defined in Art. 2 para. 2 lets a-d AMLA (Art. 3 para. 1 AMLO-FINMA). The procedural provisions (Art. 58 CDB 20 onwards), meanwhile, constitute liberal self-regulation in the form of a contract between the SBA and its members as well as further banks in Switzerland. Both the CDB and the SBA’s commentary on it are periodically revised. The currently valid versions are CDB 20 and the commentary on CDB 20.
The banks and FINMA mandate statutory auditors to review the banks’ compliance with the CDB. Special investigators and a CDB Supervisory Board assess potential violations. In the event of a violation of the CDB, the bank at fault can be fined up to CHF 10 million. This sanctioning system complements FINMA’s enforcement activity.
The Financial Action Task Force (FATF) is an international expert group based in Paris that sets global standards on money laundering. It was founded by the G7 states in 1989 and now has 37 member states, including Switzerland. The FATF has published 40 recommendations on combating money laundering and terrorist financing.
It conducts regular assessments known as mutual evaluations to check compliance with its recommendations in the individual member states.
Switzerland’s fourth mutual evaluation was conducted in the spring of 2016 and assessed its implementation of the recommendations as revised in 2012. In December 2016, the FATF published the fourth mutual evaluation report, stating that Switzerland’s overall performance was good and that its results were above average in comparison with the other countries that had already undergone evaluation (FATF Mutual Evaluation Report on Switzerland). The FATF recognised the quality of the Swiss apparatus for combating money laundering and terrorist financing and rated them as either “compliant” or “largely compliant” with regard to 31 of the 40 recommendations. Switzerland’s next comprehensive mutual evaluation will probably take place in two to three years’ time.
The Swiss legislation on money laundering has been revised to take account of international developments and the latest FATF risk assessments. The revision of the Anti-Money Laundering Act (AMLA) was adopted by the Swiss Parliament in March 2021 and is expected to enter into force in the middle of 2022. The revised Act includes the following new duties in particular:
- Verifying the beneficial owner’s details
- Regularly updating the customer’s details
The Anti-Money Laundering Ordinance (AMLO) is currently being revised, and the SBA has taken part in the consultation and submitted its response. The amendments to the Ordinance flesh out the measures introduced by the AMLA revision. Relevant provisions on reporting have also been transposed from the money laundering ordinances of the supervisory authorities and the Federal Office of Justice and Police to the Federal Council’s ordinance.
Präsident, President, Athena Avocats, Genève
Michel Y. Dérobert
Mitglied, ehem. Direktor der Vereinigung Schweizerischer Privatbanken (VSPB), Genthod
Mitglied, Rechtsanwältin, Centro Studi Villa Negroni, Vezia
Mitglied, Fürsprecher, LL.M., ehem. Managing Director und Senior Advisor General Counsel Division, Credit Suisse AG, Muri
Mitglied, Rechtsanwalt, ehem. General Counsel ZKB (1992-2016), Richter Handelsgericht ZH, Au
Mitglied, Rechtsanwalt, LL.M., Prof. für Verwaltungsrecht an der Juristischen Fakultät der Universität Freiburg, Givisiez
Sekretär, Rechtsanwalt, Friedli & Schnidrig Rechtsanwälte, Bern
stv. Sekretär, Rechtsanwalt, Des Gouttes & Associés, Genève
Untersuchungsbeauftragter, Avvocato, CSNLAW, Lugano
Untersuchungsbeauftragter, Rechtsanwalt, CMS von Erlach Poncet AG, Zürich
Didier de Montmollin
Untersuchungsbeauftragter, Avocat, DGE avocats, DGE Avocats, Genève
Untersuchungsbeauftragter, Rechtsanwalt, Lüscher Bischoff Rechtsanwälte, Zürich
Untersuchungsbeauftragter, Massard & Rossi Avocats au barreau, Neuchâtel
Untersuchungsbeauftragter, Rechtsanwalt, Wartmann Merker Rechtsanwälte, Zürich
Links & Documents
Agreement on the Swiss banks’ code of conduct with regard to the exercise of due diligence (CDB 20) (2020)
Commentary on the Agreement on the Swiss banks’ code of conduct with regard to the exercise of due diligence (CDB 20)
Leading Cases der Aufsichtkommission VSB 2. Halbjahr 2021 (1. Juli bis 31. Dezember 2021)
Leading Cases der Aufsichtkommission VSB 1. Halbjahr 2021 (1. Januar bis 30. Juni 2021)
Leading Cases der Aufsichtskommission VSB 2. Halbjahr 2020 (1. Juli bis 31. Dezember 2020)