Financial Crime World

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Switzerland Touts Strong Compliance with Anti-Terrorism Financing Laws

The Swiss financial sector has demonstrated a robust commitment to combating money laundering and terrorist financing, according to recent assessments by regulatory authorities.

Effective AML Framework

The country’s anti-money laundering (AML) framework, anchored in the Federal Act on Combating Money Laundering and Terrorist Financing in the Financial Sector (Anti-Money Laundering Act, AMLA), has been deemed effective in preventing the misuse of financial systems. The AMLA requires financial intermediaries to implement stringent due diligence and disclosure requirements to detect and prevent money laundering activities.

Regulatory Oversight

The Swiss Financial Market Supervisory Authority (FINMA) plays a key role in monitoring compliance with these regulations, conducting regular on-site inspections and engaging recognized audit firms to assist in this effort. FINMA has also issued guidelines for industry-specific anti-money laundering regulations, which vary depending on the sector.

Industry-Specific Requirements

Financial institutions, including:

  • Banks
  • Securities firms
  • Insurers
  • Institutions under the Collective Investment Schemes Act

must adhere to specific AML requirements, including:

  • Verifying the identity of contracting partners
  • Identifying beneficial owners
  • Implementing organizational measures to prevent money laundering and terrorist financing

Sector-Specific Requirements

Banks and securities firms are subject to additional requirements outlined in the “Agreement on the Swiss Banks’ Code of Conduct with Regard to the Exercise of Due Diligence” (CDB 20).

Self-Regulatory Organizations

Self-regulatory organizations (SROs) such as:

  • The Swiss Insurance Association (SIA)
  • The Swiss Bankers Association (SBA)

also play a crucial role in monitoring compliance. These organizations have established their own AML regulations, which are approved by FINMA.

Independent Portfolio Managers and Trustees

Independent portfolio managers and trustees must comply with the Anti-Money Laundering Ordinance (AMLO-FINMA). Supervisory organizations authorized by FINMA monitor these entities’ compliance with AML requirements.

Money Laundering Offenses

Money laundering, defined as the process of channelling funds from illegal activity into the legal economy, is a criminal offense punishable under Swiss law. The country’s financial intermediaries must remain vigilant in detecting and preventing money laundering activities to maintain public trust and confidence in the financial system.

International Recognition

Switzerland’s strong compliance with anti-terrorism financing laws has earned international recognition, reinforcing the country’s reputation as a responsible and reliable player in the global financial landscape.