FINANCIAL MONITORING IN SWITZERLAND

Switzerland is one of the richest countries in the world with a highly developed economy and a GDP of more than 800 billion dollars. Switzerland’s financial profile is based on its banking sector, which has been renowned for its secrecy and confidentiality since the 18th century. This reputation has helped Switzerland become a global banking center, with huge amounts of foreign money flowing into the country since the mid-20th century: in 2019, the Swiss Bankers Association estimated that Swiss bank assets were around $8.6 trillion, twice GDP Germany. As a global financial destination, money laundering in Switzerland is closely monitored.

In 2020, the Tax Justice Network ranked Switzerland third in its Financial Secrecy Index, indicating a lack of financial transparency, while several mutual assessment reports (MARs) from the Financial Action Task Force (FATF) identified ways , through which Switzerland could improve its PID/FT system. infrastructure. In response to threats from financial criminals, the Swiss government strengthened its AML/CFT regulations by passing the Anti-Money Laundering Act (AMLA) and establishing the Financial Market Supervisory Authority (FINMA), an independent supervisory body. the fight against money laundering in Switzerland. Given the risk of money laundering and potential criminal penalties, banks and financial institutions need to understand the Swiss AML/CFT situation and how to comply with FINMA’s reporting rules.

What is FINMA?

As the primary regulator of Switzerland’s financial markets, FINMA is responsible for supervising the country’s banks and financial institutions and ensuring compliance with financial regulations. FINMA’s main role is to combat money laundering in Switzerland in accordance with the provisions set out in the Swiss Criminal Code as well as the main part of Swiss AML/CFT legislation, the Federal Act on Combating Money Laundering and the Financing of Terrorism in the Financial Sector, also known as Anti-Money Laundering Act (AMLA). Under the AMLA, FINMA requires firms in Switzerland to obtain a business license and to comply with certain reporting and record-keeping rules. These rules include establishing and verifying the identity of customers, implementing appropriate screening and monitoring processes, and reporting suspicious activity to the Anti-Money Laundering Office (MRO) when such activity is detected.

The fight against money laundering in Switzerland:

According to the latest FATF report on money laundering measures in Switzerland, the Swiss government has made numerous changes to the AMLA. The last of these changes were adopted in 2021. Key points include:

• A requirement for firms to confirm the ultimate beneficial ownership of any companies with which they do business.
• Firms are required to keep customer data up-to-date
• Allowing financial intermediaries to terminate business relationships after notifying MROS of potential money laundering activity but not receiving news of the outcome of the investigation within 40 days.
• Abolition of time for MROS to process money laundering reports.

How to comply with the PID/FT rules in Switzerland

Following FATF recommendations, FINMA requires the firms it supervises to apply a risk-based approach to AML/CFT compliance. This means that firms in Switzerland must assess their clients individually and then respond according to the level of risk they face. Accordingly, high-risk clients should be subject to more stringent AML/CFT controls, while low-risk clients may only need simpler measures.

With these considerations in mind, FINMA’s AML/CFT compliance decision should include the following measures and controls:

• Customer due diligence: Firms must collect data about their customers to verify their identity and the nature of their business. If clients are legal entities, firms must establish ultimate beneficial ownership.
• Transaction monitoring: Firms should monitor their clients’ transactions for signs of money laundering in Switzerland, such as unusual transaction patterns or transactions in high-risk jurisdictions.
• Sanctions screening: In order to identify foreign sanctioned entities using the Swiss financial system to evade AML/CFT controls, firms should screen their clients against relevant sanctions lists. Switzerland maintains its own autonomous sanctions list and also enforces sanctions imposed by the UN Security Council.
• Screening of politically significant persons : Elected officials and public servants may have access to large sums of public funds and therefore pose a higher AML/CFT risk. Firms in Switzerland must screen their clients to see if they are politically awareby PEPs, and adjust their compliance actions accordingly.
• Adverse Media: Clients’ involvement in financial crimes, such as money laundering in Switzerland, may be exposed in the news before it is officially confirmed. With this in mind, firms in Switzerland should regularly screen for adverse media coverage involving their clients, including screen, print and online sources as part of their search.

Bank lawyer in Switzerland is one of our main job profiles. Our bank lawyer will advise you on the following issues

• How much money can be deposited in a bank in Switzerland?
• What to do when the bank requested documents about the origin of the cats?
• What documents confirm the origin of funds?
• Where to get documents confirming the origin of funds?
• What to do if there are not enough documents about the origin of the funds?
• How to withdraw (return) blocked funds in a Swiss bank?
• How to close a bank account?
• How to legally bypass financial monitoring in Switzerland?
• What to do if there is no source of funds?
• How to pass finmon in a Swiss bank?

Therefore, in Switzerland, it is quite important to comply with the legislation, including in the area of ​​financial monitoring.