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Swiss Financial Watchdog Fines Institutions up to CHF 1 Million for AML Failures

The Swiss Financial Market Supervisory Authority (FINMA) has issued new guidelines outlining the maximum fine of CHF 1 million for financial institutions that fail to comply with anti-money laundering (AML) regulations. The fines can be imposed for a range of violations, including failures to report suspicious transactions and provide false information.

AML Violations

According to FINMA’s guidelines, any intentional failure to comply with AML obligations outlined in the Swiss Anti-Money Laundering Act (AMLA) constitutes an administrative infraction. This includes:

Failing to identify and verify the identity of customers
Failing to identify and verify the beneficial owners of legal entities
Failing to report suspicious transactions
Providing false information

Sanctions

In addition to fines, FINMA may also impose other sanctions on institutions that violate AML regulations. These can include:

Prohibiting the commencement of new business relationships for a limited period
Requesting disciplinary action from the competent authority
Publicly disclosing decisions against financial institutions or businesses

FINMA has outlined a clear process for handling AML-related fines and sanctions. Institutions must:

Take a risk-based approach to monitoring their business relationships and transactions
Actively investigate any suspicious activity
Failure to comply with these requirements can result in significant fines and reputational damage.

Affected Industries

The new guidelines apply to a range of financial institutions, including:

Banks
Securities dealers
Insurance companies
Asset managers
Non-financial businesses that provide services related to the transfer of funds or the exchange of assets (such as art dealers, precious metal dealers, and crypto-asset service providers)

Consequences for Non-Compliance

Non-compliance with AML regulations can result in:

Significant fines
Reputational damage
Criminal charges and penalties
Public disclosure of non-compliance, which can harm an institution’s reputation and erode customer trust.

Conclusion

FINMA’s new guidelines highlight the importance of compliance with AML regulations in Switzerland. Financial institutions must take a proactive approach to monitoring their business relationships and transactions, and actively investigate any suspicious activity. Failure to comply with these requirements can result in significant fines and reputational damage.