Financial Crime World

Switzerland’s Crackdown on Money Laundering: An Inside Look at the Legal Framework

Switzerland, known for its strict confidentiality laws and status as a global financial hub, is a leader in the global fight against money laundering. In this article, we explore the Swiss legal framework designed to combat money laundering, focusing on key aspects such as specific offenses, requirements for criminal prosecution, and the role of various authorities.

Cracking Down on Money Laundering: Switzerland’s Laws

Switzerland’s fight against money laundering is codified under Article 305-bis of the Swiss Criminal Code (SCC). This provision criminalizes money laundering, making it clear that the Swiss legal system takes this issue seriously.

Christophe Emonet and Nicolas C. Herren, attorneys at Pestalozzi Attorneys at Law Ltd, explain**:

“The Swiss anti-money laundering laws criminalize the act of laundering the proceeds of a felony or aggravated tax misdemeanor. The term ‘felony’ refers to an offense punishable by a custodial sentence of more than three years. This includes various economic offenses such as misappropriation, theft, fraud, and aggravated criminal mismanagement. Moreover, since 2016, aggravated tax misdemeanors have also been included in the definition of predicate offenses.”

Proving a Money Laundering Offense: Burden of Proof

For the Swiss authorities to establish a criminal offense under Article 305-bis SCC, several elements must be proved:

  1. Existence of an asset: Defined as any benefit that has a realizable economic value, which can include cash, real estate, claims, or other rights.
  2. Existence of a predicate offense: Must meet the definition of a felony. This includes various economic offenses and aggravated tax misdemeanors.
  3. Link between the predicate offense and the asset: Prove the proceeds of the crime have been laundered.
  4. Act aimed at frustrating the forfeiture of assets.

For aggravated money laundering, the competent authorities must prove that the offender is a member of a criminal or terrorist organization, a member of a group formed for money laundering activities, or has achieved a large turnover or substantial profit through commercial money laundering.

Predicate Offenses: Scope and Reach

Article 305-bis SCC targets assets that originate from a felony or aggravated tax misdemeanor, which can also be committed abroad, provided they would be considered a felony or aggravated tax misdemeanor under Swiss law and meet the double criminality requirement.

Extraterritorial Jurisdiction: Switzerland’s Reach Beyond its Borders

Switzerland’s anti-money laundering laws extend beyond its borders when the offender has had recourse to a Swiss financial intermediary to launder assets or when the laundering operations are carried out from Swiss soil. However, Switzerland does not possess general extraterritorial jurisdiction to prosecute a money laundering offense committed abroad.

Corporate Criminal Liability: Holding Businesses Accountable

Switzerland’s money laundering regulations also target legal entities, such as corporations and partnerships, for laundering activities committed in the course of their commercial activities. These entities are penalized for failing to take necessary organizational measures to prevent such offenses.

Investigating and Prosecuting Money Laundering: The Role of Swiss Authorities

Money laundering investigations and prosecutions in Switzerland are primarily conducted by the federal and cantonal prosecuting authorities. The Swiss Federal Prosecutor’s Office, specifically the Office of the Attorney General of Switzerland, has primary jurisdiction for investigating and prosecuting notable money laundering offenses with significant transnational elements. Cantonal prosecution offices handle cases committed within their respective cantons.

Prosecuting Money Laundering Offenses: Who Takes Charge

The Swiss authorities responsible for the prosecution of money laundering offenses are the same as those in charge of the investigations: the federal and cantonal prosecuting authorities.

Statute of Limitations for Money Laundering Offenses: Time Constraints

The statute of limitations for money laundering offenses in Switzerland varies based on the severity of the crime:

  • Simple money laundering acts committed since 2014 are subject to a ten-year limitation period.
  • Those committed between 2002 and 2013 are limited to seven years.
  • Aggravated money laundering offenses are subject to a fifteen-year limitation period.

The limitation periods begin on the day the offense is committed, but if a judgment is issued by a court of first instance before the expiration of the limitation period, the time limit no longer applies.

In conclusion, Switzerland’s legal framework against money laundering is robust and effective, with stringent penalties for offenders and the resources available to investigate and prosecute these crimes. The Swiss authorities take their responsibilities seriously in combating money laundering, ensuring that their country remains a reputable and trusted global financial hub.