Significant Amendments Of Anti-Money Laundering Laws In Switzerland
Responding to an international demand for more transparency and harsher money laundering regulations, the Swiss legislator is constantly revising Swiss anti-money laundering law. The latest revision, adopted in December 2014, is the new Act on the implementation of the Financial Action Task Force's Recommendations ("Implementation Act") amending eight different acts relating to various matters. As one of the most important and controversial modifications, the Implementation Act introduces two predicate offences to money laundering in relation with direct and indirect taxation.
The FATF and the FATF Recommendations
The Financial Action Task Force ("FATF") is an intergovernmental body in charge of setting standards, through non-binding recommendations (soft law), to combat money laundering. The current version of the FATF Recommendations was adopted in 2012. The implementation of FATF Recommendations is controlled by a system of peer review and enforced by the constant threat of being added to the FATF blacklists.
The Implementation Act: Entering into Force in Two Stages
The Implementation Act will enter into force in two stages:
Dispositions on the transparency of legal entities and bearer shares will enter into force on 1 July 2015; the remaining amendments, including the ones on tax predicate offenses, will enter into force on 1 January 2016. Overview of the Amendments
The Implementation Act modifies the following areas:
Creation of two predicate tax offences to money laundering; announcement of money laundering suspicions to the Money Laundering Reporting Office Switzerland ("MROS").
The modification relates to the three following points:
The MROS is given 20 days instead of five to analyze the suspicions and decide whether it will refer the case to the criminal authorities; the assets are frozen if and when the case is communicated to the criminal authorities. Currently, the assets are already frozen when the suspicions are communicated to the MROS; in principle, the client should not be informed of the communication of the suspicions to the MROS. Extension of the definition of Politically Exposed Persons ("PEPS").
Increased due diligence requirements apply to transactions linked with PEPs and persons close to them. Three categories of persons are considered as PEPs:
Persons who are or have been entrusted with governing public functions abroad; persons who are or have been entrusted with governing public functions in Switzerland; and...
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