Financial Crime World

Money Laundering Crimes in Switzerland: A Look at the Legal Framework and Enforcement

Switzerland, famous for its strong financial sector, has stringent regulations against money laundering. This article outlines the Swiss Criminal Code (SCC)’s legal framework for prosecuting money laundering offenses at the national level.

Criminal Offenses and Enforcement

Money Laundering Offenses

  • Money laundering offenses are defined in art. 305bis no. 1 of the SCC.
  • Punishes concealing or disguising the origin of assets obtained from a felony or qualified tax offense.
  • The Federal Supreme Court interprets these regulations, stating that money laundering must relate to assets that could be forfeited.

Elements of a Money Laundering Offense

  • Proof of a predicate offense
  • Assets from that offense
  • Willful intent to hinder forfeiture
  • Awareness or reasonable suspicion that the assets derive from a predicate offense

Predicate Offenses

  • Various offenses against property
  • Bankruptcy offenses
  • Certain forms of drug dealing
  • Bribery
  • Tax evasion if committed commercially or with third parties and causing significant unlawful advantage or damage

Extraterritorial Jurisdiction

  • If predicate offense is committed abroad, Swiss prosecution is warranted for money laundering committed in Switzerland
  • Extraterritorial jurisdiction may raise issues when the foreign state does not recognize forfeiture of specific assets

Authorities and Investigations

Handling of Money Laundering Cases

  • Either the Federal Prosecutor’s Office or cantonal public prosecutors handle money laundering cases depending on the targeted administration of justice
  • The Money Laundering Reporting Office Switzerland (MROS) analyses suspicious transactions reported by financial intermediaries and collaborates with relevant prosecuting authorities
  • Violations of reporting obligations are dealt with by the Federal Department of Finance

Liability and Penalties

  • Both natural persons and companies can be held liable
  • Companies bear liability under principles of subsidiary and cumulative liability
  • Maximum prison sentence for individuals is three years
  • Qualified offenses: five-year sentence and fine
  • CHF 3,000 daily penalty units or CHF 5 million for companies

Statute of Limitations

  • 10-year statute of limitations for basic offenses
  • 15-year statute of limitations for qualified offenses

Forfeiture and Confiscation

  • Assets are forfeited or confiscated when acquired through criminal offenses
  • Exceptions: restoration of prior legal position or disproportionate hardship to third party

Civil Forfeiture or Non-Criminal Confiscation

  • Applies under certain conditions

Enforcement Actions

  • Primarily carried out by the Federal Prosecutor’s Office
  • Ensure seizure and forfeiture of assets obtained through criminal offenses (art. 70 para. 1 SCC)
  • Civil forfeiture or non-criminal confiscation may apply under certain conditions

Switzerland has no cantonal or municipal-level money laundering provisions, with enforcement actions primarily carried out by the Federal Prosecutor’s Office and related forfeiture and confiscation authorities.