FINMA warns of envisaged weakening of the Swiss Anti-Money Laundering Act
In the last days, the newly published information of the International Consortium of Investigative Journalists (hereinafter “ICIJ”) has caused a stir. According to the ICIJ, banks from all over the world had been doing business with high-risk customers and, in doing so, violated money laundering prevention rules on a large scale. Furthermore, the ICIJ emphasised that the banks would have been aware that the regulatory authorities entrusted with the money laundering supervision were chronically understaffed and therefore could perform their monitoring function only insufficiently.
According to a recent article published in the Neue Zürcher Zeitung(hereinafter “NZZ”), the quality of suspicious transaction reports from banks to the Swiss Money Laundering Reporting Office (hereinafter “MROS”) has also declined in Switzerland. Prof. Dr. Urs Zulauf and Dr. Doris Hutzler came to a similar conclusion in a scientific paper published in 2019 (in German): According to the both authors, in recent times financial institutions in Switzerland would have frequently reported cases of uncertainty without in-depth clarification and without providing the necessary documentation to the authority. The consequence of this would have resulted in a growing backlog of MROS.
According to the NZZ, despite these circumstances, the Swiss parliament (the Council of States) is now planning a revision to the Swiss anti-money laundering legislation: The NZZ reports that the Swiss lawmaker plans to change the Swiss Anti-Money Laundering Act in order that a reporting obligation to MROS shall not any longer arise in case of a simple doubt but only i) if there are concrete indications or several concrete indications of predicate offences, and ii) if “this is credibly demonstrated or confirmed by additional investigations”. In response to this envisaged law amendment, the Swiss Financial Market Supervisory Authority (FINMA) has now emphasised to the NZZ that with this revision “even blatant cases will no longer need to be reported” and that the second condition would “undermine” the system for reporting suspected cases of money laundering.
Find the NZZ article under: https://www.nzz.ch/wirtschaft/finma-warnt-vor-geldwaescherei-vorlage-des-staenderats-ld.1577670
Find the scientific article of Prof. Dr. Urs Zulauf and Dr. Doris Hutzler(open access) under: https://urszulauf.ch/wp-content/uploads/2020/03/ZulaufHutzler2019-Meldewesen-Geldw%C3%A4scherei-recht_04_2019.pdf