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Switzerland: AML Regulations for Financial Intermediaries

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In Switzerland, anti-money laundering (AML) regulations are enforced through the Anti-Money Laundering Act (AMLA). The act applies to all financial intermediaries, including banks, portfolio managers, trustees, and other entities that accept or hold assets belonging to others.

Scope of AML Regulations

The AMLA covers a wide range of activities in the financial sector, including credit and payment transactions. However, its regulations can also apply to individuals and entities that primarily provide services in other sectors if they also perform activities as financial intermediaries.

  • For example, an attorney providing financial services to clients or advising outside their typical activity is considered a financial intermediary under the AMLA.
  • Since 2014, traders who professionally trade in goods and receive cash in payment are also subject to anti-money laundering regulations.
  • A recent draft bill proposes extending the scope of the AMLA to include advisers, legal or accounting advice related to the sale or purchase of real estate, unless provided in connection with a proceeding.

Payment Services and Money Transmitters

The AMLA applies to payment systems that require a license from the Swiss Financial Market Supervisory Authority (FINMA) under article 4(2) of the Financial Market Infrastructure Act (FinMIA). Payment traffic services, including electronic transfers and means of payment such as credit cards and travelers’ cheques, are also subject to anti-money laundering regulations.

Digital Assets

The AMLA’s concept of “assets” covers all assets and pecuniary benefits that have an economic value, including digital assets. Financial intermediaries who hold or assist in the transfer of crypto-currencies are therefore subject to the same obligations as if they were handling fiat currency.

AML Compliance Requirements

Financial intermediaries subject to anti-money laundering regulations must comply with several material obligations, including:

  • Verifying the identity of customers and beneficial owners
  • Identifying and verifying the object and purpose of business relationships
  • Keeping appropriate documents to establish verifications
  • Periodically checking that required documents are up-to-date

In addition, financial intermediaries must report well-founded suspicions of money laundering to the Money Laundering Reporting Office Switzerland (MROS). They are also required to maintain organizational obligations, including training and personnel control.

Conclusion

Switzerland’s AML regulations aim to prevent money laundering and terrorist financing by imposing strict compliance requirements on financial intermediaries. Failure to comply with these requirements can result in severe penalties, including fines and even criminal prosecution. As the regulatory landscape continues to evolve, it is essential for financial institutions to stay up-to-date with the latest developments and maintain robust AML programs.

Sources

  • Swiss Federal Department of Finance
  • Swiss Financial Market Supervisory Authority (FINMA)
  • Money Laundering Reporting Office Switzerland (MROS)