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Switzerland Takes Steps to Comply with New Requirements on VASPs

Geneva, Switzerland - The Swiss government has taken significant steps to comply with the new requirements set out by the Financial Action Task Force (FATF) for Virtual Asset Service Providers (VASPs).

Risk-Based Approach and Report

According to a recent report, Switzerland has conducted a risk-based approach and published a report identifying risks and vulnerabilities associated with crypto-assets. The country has also presented factors to mitigate these risks, as well as recommendations for legislators.

Compliance Requirements

Switzerland’s financial intermediaries, including VASPs, are subject to the Anti-Money Laundering Act (AMLA). Before commencing activities in Switzerland, natural or legal persons acting as financial intermediaries must obtain a license from the Swiss Financial Market Supervisory Authority (FINMA) or become members of an Organization Recognized by FINMA (OAR), and choose to be subject to the supervision of either FINMA or the OAR.

VASP Requirements

VASPs are required to comply with the requirements of FATF Recommendations 10 to 21, to the same extent as other financial intermediaries. The country has implemented a risk-based approach and licensing requirements for VASPs.

Challenges and Progress

However, Switzerland still faces some challenges in implementing these new requirements. For example, the threshold for occasional transactions is not fully compliant with FATF requirements, and there are limitations on the sanctions available to FINMA. Despite these challenges, Switzerland’s efforts to implement the new requirements have been recognized by the FATF.

International Cooperation

In addition, Switzerland has taken steps to improve international cooperation, including sharing information with foreign financial intelligence units and cooperating with other countries to combat money laundering and terrorist financing.

Overall Compliance

Overall, Switzerland’s efforts to comply with the new requirements set out by the FATF have been recognized as largely compliant. However, the country still faces some challenges in fully implementing these requirements, particularly in the areas of risk-based approach and international cooperation.

Recommendations for Action

To further improve compliance with the new requirements, Switzerland is recommended to:

  • Fully implement a risk-based approach for VASPs
  • Increase transparency and cooperation with foreign financial intelligence units
  • Enhance sanctions against non-compliant VASPs
  • Improve the threshold for occasional transactions

By taking these steps, Switzerland can continue to play a leading role in combating money laundering and terrorist financing in the digital age.

Source

Swiss Federal Department of Finance. (2022). Switzerland: Third Enhanced Follow-up Report. Retrieved from https://www.fdf.admin.ch/dfj/en/home/fatf-reports/switzerland-third-enhanced-follow-up-report.html