Financial Institutions and Businesses Face Tough Anti-Money Laundering Requirements
In a bid to combat financial crimes, the government has imposed strict anti-money laundering (AML) requirements on various financial institutions and businesses operating in the country.
Who Must Comply with AML Regulations?
Banks, investment firms, e-money businesses, insurance undertakings, exchange offices, asset management companies, and other financial entities are subject to AML requirements. These entities must comply with a range of duties, including:
- Identifying and verifying the identity of contracting parties
- Verifying the identity of beneficial owners
- Verifying recipients of distributions from legal entities
Non-financial businesses and professions also fall under the scope of AML regulations. These include:
- Lawyers and law firms providing tax advice or assisting in financial transactions
- Real estate agents
- Persons trading in goods
- TT service providers
- Operators of trading platforms for non-fungible tokens, and others.
What are the AML Requirements?
AML requirements for these entities include:
- Establishing a business profile
- Supervising business relationships at a level commensurate with the risk
- Conducting timely monitoring of their business relationships
- Being alert to changes in customer behavior or deviations from typical patterns
- Carrying out investigations when suspicious transactions arise
Risk-Based Approach
The government has emphasized the importance of a risk-based approach to AML compliance, requiring entities to assess and manage the risks associated with their business relationships and transactions.
Payments and Money Transmission Activities
Certain types of payments or money transmission activities are subject to AML requirements. These include:
- Cash transactions involving CHF 10,000 or more
- Transactions involving crypto-assets
- Exceptions apply in limited circumstances.
Purpose of AML Regulations
The regulations aim to prevent financial crimes such as money laundering, terrorist financing, and other illicit activities. Entities failing to comply with AML requirements may face severe penalties, including fines and even criminal prosecution.
Conclusion
As the government continues to strengthen its efforts to combat financial crimes, businesses and professionals are urged to familiarize themselves with the new regulations and ensure compliance to avoid any legal consequences.