Financial Crime World

Switzerland’s Financial Sector Takes Steps to Improve Anti-Money Laundering Measures

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Zurich, Switzerland - The Swiss authorities have made significant progress in addressing shortcomings identified in the country’s anti-money laundering (AML) measures, according to a recent report.

Progress Made in AML Regime

The Fourth Enhanced Follow-up Report, published on June 26, 2019, highlights the steps taken by the Swiss financial sector to improve its AML regime. The report notes that:

  • A risk-based approach to verification and updating of customer data is now being implemented, with financial intermediaries prioritizing vigilance measures according to risk profiles.
  • The revision of the Banking Act (LBA) has remedied shortcomings related to the obligation to verify the identity of beneficial owners.
  • Updated due diligence documents and data have been improved, allowing for more effective monitoring of customer relationships.

Remaining Shortcomings

However, the report identifies some remaining shortcomings:

  • Lack of explicit text requiring banks to apply due diligence measures for occasional transactions in wire transfers.
  • Absence of an explicit requirement for financial intermediaries to understand ownership and control structures.
  • Absence of specific provisions for cases where there are doubts about the identity of the beneficial owner when dealing with legal persons.
  • Limited scope of taking into account the beneficiary of a life insurance policy as a risk factor.

Conclusion

Despite these minor shortcomings, the report concludes that Switzerland’s financial sector is “largely compliant” with AML standards. The Swiss authorities have demonstrated a commitment to improving their AML regime, and it is expected that further progress will be made in addressing the identified weaknesses.

Importance of Ongoing Vigilance

The report highlights the importance of ongoing vigilance and monitoring to ensure that Switzerland’s financial sector remains effective in preventing money laundering and terrorist financing.