Money laundering prevention: a strategic goal
FINMA has set itself the goal of achieving a sustained impact on institutions in their efforts to prevent money laundering. Its focus in 2017 was on institutions’ reporting systems and their risk management.
Main activities FINMA | Annual Report 2017
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ings. The financial intermediary concludes that Consistent compliance with measures designed the assets demonstrably are not linked with the to prevent criminal financial activity is strategically matter reported in the press and are therefore important to Switzerland’s export-oriented and innot tainted. The analysis is documented. ternationally networked financial centre. The reporting system prescribed in the Anti-Money Launder- The financial intermediary has internal guidelines ing Act (AMLA) is a significant measure in that regard. to regulate in which situations it would (as an Once market participants involved in criminal activexception) also inform FINMA of a reported matity realise that financial institutions are likely to reter in accordance with Article 34 AMLO-FINMA. port suspect funds to the Money Laundering ReportThese include the client’s involvement in a major ing Office Switzerland (MROS), they will be more international money laundering scandal or a reluctant to bring illicit funds into Switzerland; recase that could develop into such a scandal due porting suspect funds also helps the criminal authorto, for example, the client being a politically ities with their work. FINMA therefore stepped up exposed person (PEP) and having received funds its supervision and investigations of reporting under of several million francs. AMLA with 23 on-site supervisory reviews in 2017. It also filed criminal charges in seven instances based Examples of poor reporting conduct on contravention of the reporting obligation in Ar- × An international wealth management bank fails ticle 9 in conjunction with Article 37 AMLA. FINMA to regularly check its client base against a dataimposed its own enforcement measures in a numbase maintained by an external compliance prober of cases. vider. It is unaware of new information coming to light about its client which otherwise should FINMA encountered good and bad practices in the have led to the filing of a report. course of its supervisory and enforcement activity × Unusual transactions are connected to a criminal during the reporting year. Some of the more comoffence committed abroad punishable by a mon situations are outlined below. custodial sentence of several years. The financial intermediary delays on reporting the issue. Examples of good reporting conduct Instead it commissions a law firm to draw up a detailed legal opinion on the foreign criminal After criminal proceedings are initiated against offence and its aptness of being a predicate a client due to a serious offence, the financial money laundering offence (see Federal intermediary conducts its own enquiry. It then Administrative Court decision B-6815/2013 submits a report as it cannot exclude the possiof 10 June 2014). bility that the assets in question are connected × The financial intermediary investigates money to the offence. laundering suspicions arising from a dubious A financial intermediary conducts an in-depth business relationship involving substantial assets investigation of a client in response to media and comes to the conclusion that there are no reports of a suspected criminal offence. The grounds for making a report. It does not docuinvestigation includes checking information ment its investigations or the reasons why it did according to the know-your-customer (KYC) not exercise its right to report. principle, examining the money flows and time sequences in detail and documenting the find-