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Switzerland Takes Strides to Enhance Anti-Money Laundering and Counter-Terrorism Measures
In a bid to strengthen its anti-money laundering (AML) and counter-terrorism financing (CFT) framework, Switzerland has committed to regular monitoring with the Financial Action Task Force (FATF). The country’s 5th round of mutual evaluation will focus on improving the implementation of AML and CFT measures.
Recommendations and Regulatory Changes
The next steps for recommendations 22 and 23 may lead to further definition of guidance on due diligence, potentially broadening the scope of obliged entities. This could be similar to the EU’s 6th anti-money laundering directive. Additionally, the Swiss government has proposed banning Hamas and related organizations in February 2024, aiming to prevent terrorist financing.
Enhanced CFT Controls
The Wolfsberg Group, a leading industry association, has also called for the provision of official lists of suspected terrorists and terrorist organizations on a globally coordinated basis. This may lead to requirements for financial institutions to implement enhanced CFT controls on clients and third parties.
Increased Enforcement Actions
In 2023, Swiss banks froze CHF 7.7 billion in assets, highlighting the need for continued vigilance against sanctions circumvention and evasion. The US Department of Justice’s $123 million fine against Pictet, a Swiss bank, serves as a reminder of the importance of effective due diligence and AML/CFT compliance.
Transparency Register on Beneficial Owners
The proposed Federal Act on Transparency of Legal Entities (TLEA) aims to introduce a transparency register for beneficial owners of legal entities. This will require approximately 500,000 legal entities in Switzerland to disclose detailed information about their beneficial owners, including:
- Full name
- Birth date
- Nationality
- Residence
- Any relevant data pertaining to control
Key Changes
Under TLEA, legal entities must:
- Determine and record the details of their beneficial owners
- Periodically review and update this information
- Provide documentation substantiating the information
- Disclose data regarding beneficial ownership within a month of gaining control or stake
Beneficial owners will also be required to declare their ownership and any subsequent changes to the data provided.
Industry Support
As leading providers of beneficial ownership data, Moody’s offers comprehensive solutions for AML/CFT compliance programs. Our expertise can support risk management, AML, and CFT compliance programs specific to Swiss regulations or international frameworks. We provide:
- Access to extensive ownership and control data
- Advanced analytical tools for identifying potential risks
- Global reach for understanding beneficial ownership structures and international regulatory responsibilities
If you would like to discuss how Moody’s can support your AML/CFT program, please do not hesitate to contact us.
Conclusion
Switzerland is taking a proactive approach to enhancing its anti-money laundering and counter-terrorism financing measures. The introduction of TLEA will bring significant changes to the country’s regulatory framework, requiring financial institutions to adapt their compliance programs quickly. At Moody’s, we are committed to supporting our clients in this effort, providing comprehensive solutions for AML/CFT compliance and risk management.