Combating money laundering

The CDB was introduced in 1977 and sets out banks’ duties with regard to identifying the contracting partner and establishing the identity of the beneficial owner. It also prohibits active assistance in the flight of capital and tax evasion. In these respects, the CDB is at the centre of Switzerland’s pioneering efforts to combat money laundering.

The material provisions of the CDB (Arts 1-57 CDB) have the same status as an ordinance due to a reference in Art. 35 AMLO-FINMA and thus apply to all financial intermediaries as defined in Art. 2 para. 2 lets a-d AMLA (Art. 3 para. 1 AMLO-FINMA). The procedural provisions (Art. 58 CDB 20 onwards), meanwhile, constitute liberal self-regulation in the form of a contract between the SBA and its members as well as further banks in Switzerland. Both the CDB and the SBA’s commentary on it are updated periodically. Work on revising CDB 2020 and the SBA commentary is currently under way. Due to its dependence on the ongoing legislative project to increase transparency in relation to legal entities (TLEA), in particular as regards consistency in the definition of beneficial ownership, the revised CDB and commentary will not be available until 1 January 2027 at the earliest.

The banks and FINMA mandate statutory auditors to review the banks’ compliance with the CDB. Special investigators and a CDB Supervisory Board assess potential violations. In the event of a violation of the CDB, the bank at fault can be fined up to CHF 10 million. This sanctioning system operates in parallel with FINMA’s enforcement activity.

The Financial Action Task Force (FATF) is an international expert group based in Paris that sets global standards on money laundering. It was founded by the G7 states in 1989 and now has 37 member states, including Switzerland. The FATF has published 40 recommendations on combating money laundering and terrorist financing.

It conducts regular assessments, known as mutual evaluations, to check compliance with its recommendations in the individual member states.

Switzerland’s fourth mutual evaluation was conducted in the spring of 2016 and assessed its implementation of the recommendations as revised in 2012. In December 2016, the FATF published the fourth mutual evaluation report, stating that Switzerland’s overall performance was good and that its results were above average in comparison with the other countries that had already undergone evaluation (FATF Mutual Evaluation Report on Switzerland). The FATF recognised the quality of the Swiss apparatus for combating money laundering and terrorist financing and rated it as either “compliant” or “largely compliant” with regard to 31 of the 40 recommendations. Switzerland’s next comprehensive mutual evaluation is scheduled to take place in 2025.

The Swiss legislation on the prevention of money laundering is revised on an ongoing basis, in part to take account of international developments and the latest risk assessments by the Financial Action Task Force (FATF).

AMLA

The most recent revision of the Federal Act on Combating Money Laundering and Terrorist Financing (Anti-Money Laundering Act, AMLA) was adopted by the Swiss Parliament in March 2021 and entered into force on 1 January 2023. The revised Act includes the following new duties in particular:

• Verifying the beneficial owner’s details
• Regularly updating the customer’s details.

AMLO

Following the revision of the AMLA, the Federal Council’s Ordinance on Combating Money Laundering and Terrorist Financing (Anti-Money Laundering Ordinance, AMLO) was also revised. The revised Ordinance entered into force on 1 January 2023. The amendments flesh out the measures introduced by the AMLA revision (see above). Relevant provisions on reporting were also transposed from the anti-money laundering ordinances of the supervisory authorities and the Federal Department of Justice and Police to the Federal Council’s ordinance.

AMLO-FINMA

To ensure that the revisions of the AMLA and AMLO are enforced, the Ordinance of the Swiss Financial Market Supervisory Authority on Combating Money Laundering and Terrorist Financing in the Financial Sector (AMLO-FINMA) was revised as well. FINMA put its revised Ordinance into force on 1 January 2023.

The revised AMLO-FINMA essentially contains no provisions governing specific details of establishing the identity of the beneficial owner or periodically verifying whether the customer’s details are up to date. Only Art. 26 para. 2 let. l AMLO-FINMA, concerning the requirements for internal directives, was supplemented to the effect that financial intermediaries must issue an internal directive on the criteria for verifying whether customer details are up to date. FINMA also repealed the implementing provisions on reporting in the AMLO-FINMA as they had been transposed to the Federal Council’s AMLO.

Current legislative project to increase transparency with respect to legal entities

On 30 August 2023, the Federal Department of Finance (FDF) opened a consultation concerning the Federal Act on the Transparency of Legal Entities (TLEA). The SBA has published a response and welcomes the federal government’s efforts to strengthen Switzerland’s apparatus for combating money laundering in line with international standards through the TLEA. A key element of this is a central register for recording the beneficial owners of companies.

Office
Dominik Eichenberger
Rechtsanwalt
Bahnhofplatz 5
Postfach
3001 Bern
Telefon: +41 (0) 31 326 50 00
E-Mail: vsb (at) fslaw.ch

Othmar Strasser
President; lawyer, former General Counsel at ZKB (1992–2016), judge at the Zurich Commercial Court, Au

Tamara Erez
Member; lawyer, Centro Studi Villa Negroni, Vezia

Sylvain Matthey
Member; lawyer, independent director and consultant, former Head of Legal and Compliance at Pictet, Lombard Odier and Banque Syz, Thônex

Marcel Schmocker
Member; lawyer, LL.M., former Managing Director and Senior Advisor, General Counsel Division, Credit Suisse AG, Muri

Martin Zuan
Member; MLaw, Owner and Partner Bankersforum, former Director PwC, Meilen

Jean-Baptiste Zufferey
Member; lawyer, LL.M., Prof. of Administrative Law at the Fribourg University Law Faculty, Givisiez

Dominik Eichenberger
Secretary; lawyer, Friedli & Schnidrig Attorneys-at-Law, Bern

Arun Chandasekharan
Deputy secretary; lawyer, Des Gouttes & Associés, Geneva

Nadine Balkanyi-Nordmann
Investigator; lawyer, Lexperience, Legal & Compliance, Services, Zurich

Frédérique Bensahel
Investigator; lawyer, FBT Avocats, Geneva

Daniele Calvarese
Investigator; lawyer, CSNLAW, Lugano

Morys Cavadini
Investigator; lawyer, BMA Brunoni Mottis & Associati Studio Legale SA, Lugano

Marquard Christen
Investigator; lawyer, CMS von Erlach Poncet AG, Zurich

Christian Lüscher
Investigator; lawyer, Lüscher Bischoff Rechtsanwälte, Zurich

Patrick Mouttet
Investigator; lawyer, Athena Avocats, Geneva