Financial Crime World

Switzerland’s Anti-Money Laundering Regime: A Comprehensive Guide

Introduction

In Switzerland, the fight against money laundering is a top priority. The country has implemented a robust anti-money laundering (AML) regime, which is governed by the Anti-Money Laundering Act (AMLA) and the Financial Market Supervisory Authority (FINMA).

Supervision of Self-Regulatory Organizations

According to Article 12(c) AMLA, self-regulatory organizations (SROs) recognized by FINMA are responsible for supervising compliance with due diligence obligations among their affiliated portfolio managers and trustees. This includes:

  • Ongoing AML supervision
  • Issuance of decrees if necessary to enforce financial market laws

Government Agencies Responsible for Examination and Enforcement

FINMA is responsible for:

  • Monitoring prudentially supervised financial intermediaries, including banks
  • Entering into ongoing supervision of SROs if necessary to enforce financial market laws
  • Monitoring professional organizations’ supervisory activities through its supervisory committee

Financial Intelligence Unit

The Money Laundering Reporting Office at the Federal Office of Police (MROS) serves as Switzerland’s national central office for:

  • Examining suspicious transaction reports
  • Analyzing them to identify potential money laundering activities

Statute of Limitations

Violations of AMLA and financial market laws are subject to a seven-year limitation period, as specified in Article 52 FINMASA. However, reporting obligations under Article 9 AMLA constitute a “continuing offense,” which can affect the commencement of the limitation period.

Maximum Penalties

The maximum penalties for failure to comply with regulatory and administrative AML requirements vary among SROs, but can reach up to CHF 10 million. FINMA itself does not have authority to issue fines, but may take other measures such as:

  • Confiscating profits
  • Issuing occupational bans

Other Types of Sanctions

In addition to monetary fines, violations of AMLA due diligence obligations can result in:

  • Withdrawal of authorization to exercise financial intermediary activity
  • Prohibition on practicing a profession
  • Confiscation of profits made through serious violations
  • Declaratory orders or specific orders to restore the proper state of affairs

Criminal Sanctions

Violations of reporting obligations under Article 9 AMLA can result in criminal sanctions for natural persons, including:

  • Fines up to CHF 500,000 (intentional violation)
  • Fines up to CHF 150,000 (negligence)
  • Imprisonment of up to three years or a fine for money laundering under Article 305bis Swiss Criminal Code (SCC)

Conclusion

Switzerland’s AML regime is designed to prevent the misuse of its financial system for illicit activities. With its robust supervision and enforcement mechanisms in place, Switzerland continues to be a trusted hub for international finance and trade.