Financial Crime World

Switzerland Takes a Bite Out of Financial Crime: New Legislation Enhances Fraud Prevention

Switzerland, known for its strict banking secrecy laws, is stepping up its fight against financial crime. The Swiss Federal Council recently approved amendments to the country’s Anti-Money Laundering Act (AMLA), which will take effect on January 1, 2023. Here’s a closer look at the new legislation and its implications.

Expanding the Reach of the AMLA

The new regulations will expand the definition of “financial intermediaries” under the AMLA, requiring more businesses to adhere to anti-money laundering rules:

  • Art dealers
  • Real estate agents
  • Lawyers

Swiss authorities believe these professionals are often used as channels for moving illicit funds.

Establishing a Central Anti-Money Laundering Authority

One of the most significant changes under the new law would be the establishment of a central anti-money laundering authority. This authority will be responsible for:

  • Issuing guidelines
  • Supervising financial intermediaries
  • Conducting risk assessments
  • Imposing penalties when necessary

Crucial Roles for FINMA and FinCen

The Swiss Financial Market Supervisory Authority (FINMA) and the Swiss Financial Crime Control Authority (FinCen) will play crucial roles in implementing the new law. Specifically:

  • FINMA: Supervising financial institutions and insurers
  • FinCen: Overseeing non-financial businesses and professionals

Implementing the Anti-Money Laundering Reporting Office for Switzerland (MROS)

Swiss authorities are also implementing a new electronic reporting and identification system called the Anti-Money Laundering Reporting Office for Switzerland (MROS). This system will:

  • Enable financial intermediaries and other covered entities to report any suspicious transactions electronically and securely

Clarifying Customer Due Diligence and Reporting Requirements

The Swiss Federal Department of Finance (FDF) has issued new guidelines on customer due diligence and reporting requirements for financial intermediaries, clarifying expectations regarding:

  • Customer identification
  • Risk assessment
  • Ongoing monitoring of transactions

Protecting the Global Financial System and Switzerland’s Reputation

Swiss authorities believe that these measures will strengthen the country’s reputation as a robust and responsible financial hub, while also protecting the integrity of the global financial system from illicit funds. Industry experts agree, pointing to Switzerland’s commitment to combatting financial crime as an example for other countries and reinforcing its position as a world leader in financial services.

Maintaining the Balance Between Privacy and Prevention

Switzerland’s financial crime legislation is under constant review, with the government striving to maintain the balance between protecting the country’s financial sector and respecting the privacy rights of its citizens. Despite facing increasing global pressure, Swiss authorities remain committed to implementing policies that prioritize financial stability, transparency, and prevention of money laundering and tax evasion.