Financial Crime World

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Switzerland’s Anti-Terrorism Financing Laws Fall Short, Says Global Watchdog

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A report released by the Financial Action Task Force (FATF) has found that while Switzerland’s anti-money laundering and counter-terrorism financing (AML/CFT) regime is technically robust, it still requires improvements to be fully effective. The assessment, which was conducted in 2016, reviewed both the level of effectiveness of Switzerland’s AML/CFT regime as well as its technical compliance with international standards.

Strengths and Weaknesses

Since its last assessment in 2005, Switzerland has taken significant steps to strengthen its AML/CFT regime, including legal reforms aimed at addressing money laundering risks. Law enforcement authorities have also demonstrated their ability to investigate and prosecute money laundering cases, resulting in the repatriation of large sums to affected countries.

However, the report noted that there are still areas for improvement:

  • Supervisory authorities could do more to ensure that financial institutions comply with AML/CFT requirements, particularly with regards to reporting suspicious transactions.
  • The sanctions imposed for non-compliance must be commensurate with the severity of the misconduct and serve as a deterrent to other institutions.

Switzerland has also been praised for its commitment to mutual legal assistance, which is critical in combating money laundering and terrorist financing. The country has recently adopted new measures aimed at addressing some of the concerns raised by the FATF, including the supervision of financial groups.

Conclusion

The report concludes that while Switzerland’s AML/CFT regime is strong, there are still areas for improvement. Swiss authorities are encouraged to continue their efforts to strengthen their system and ensure its effective implementation.