Financial Crime World

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Switzerland Implements Illicit Assets Act (FIAA) to Combat Economic Crime

August 2018 - The Swiss Federal Council has extended its cooperation agreement with Europol to include offenses such as insider trading, financial market manipulation and crimes against the financial interests of European countries. This move comes as Switzerland grapples with its reputation for being a hub for illicit assets.

Perception vs Reality

While Switzerland is often associated with high-profile cases of economic crime, such as the FIFA corruption scandal, many companies are unaware of the risks they face. Economic crime is notoriously difficult to recognize and understand, making it easy for perpetrators to go undetected.

Technology-Driven Crime

The rapid development of digital technologies has given a new dimension to economic crime. Cybercrime, in particular, has become a major concern, with 41% of Swiss companies polled perceiving it as the greatest threat. Despite this, only half of Swiss companies have a cybersecurity program in place, which is well below the global average.

Combating Economic Crime

Organizations can take four approaches to combat economic crime:

  • Inspection: Conducting regular risk assessments can help identify vulnerabilities and prioritize security measures.
  • Prevention: Implementing modern controls and protective measures can reduce a company’s vulnerability to fraud. A code of ethics can also communicate a basic understanding of honesty and transparency to staff.
  • Detection: New technologies, such as artificial intelligence (AI), can help uncover fraudulent activities by recognizing anomalies in patterns.
  • Sanctions: Companies must report internal offenses to the authorities and penalize misconduct unconditionally.

A Question of Culture

Establishing a corporate culture where mistakes and suspicions are openly discussed is crucial. Without this openness, irregularities will be swept under the carpet, and wrongdoings ignored. The attitude to economic crime also raises fundamental ethical questions for international companies, such as how much control is appropriate and how much autonomy is necessary.

The Illicit Assets Act (FIAA)

The FIAA aims to combat economic crime by providing a framework for detecting and recovering illicit assets. The act requires financial institutions to report suspicious transactions and provides for the confiscation of assets derived from criminal activity.

Conclusion

Economic crime is a serious issue that requires a comprehensive approach. By implementing the Illicit Assets Act (FIAA) and adopting best practices in inspection, prevention, detection, and sanctions, Switzerland can work towards creating a safer and more transparent financial environment.