Switzerland Enhances AML/CTF Measures, Addresses Shortcomings
Geneva, Switzerland - In a significant step towards strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) regime, Switzerland has made notable improvements in several areas. According to a recent report, the country’s authorities have taken concrete steps to address shortcomings identified in previous evaluations.
Risk-Based Approach Now Mandatory
The introduction of a risk-based approach for banks and securities dealers when verifying the identity of beneficial owners is one major development. This change has led to an upgrade in criteria 10.5, 10.8, 10.10, and 10.11.
Due Diligence Measures Enhanced
The revision of the Swiss Banking Act (LBA) has also improved due diligence measures applicable to existing customers. The update of due diligence documents and data has been welcomed by experts as a significant step towards ensuring greater transparency and integrity in financial transactions.
Remaining Shortcomings
While progress has been made, some shortcomings still persist:
- Absence of Explicit Text: No explicit text requiring banks to apply due diligence measures for occasional transactions in the form of wire transfers.
- Lack of Understanding: No explicit statement requiring financial intermediaries to understand ownership and control structures.
- Inadequate Documentation: Absence of a requirement for addresses in documents equivalent to extracts from commercial registers.
- Uncertainty on Beneficial Owners: Uncertainty regarding the verification of beneficial owners when dealing with legal persons.
- Limited Consideration of Beneficiaries: Limited consideration of beneficiaries in life insurance policies as risk factors.
- No Maintenance Requirement: No express provision on maintaining due diligence over and above transaction execution.
Conclusion
Despite these remaining shortcomings, Switzerland’s efforts to strengthen its AML/CFT regime have been deemed “Largely compliant” by international experts. The country’s authorities are to be commended for their commitment to addressing the identified shortcomings and implementing measures to prevent money laundering and terrorist financing.
Sources:
- Swiss Federal Banking Commission
- Anti-Money Laundering Experts Group