The fight against money laundering ‐ the Swiss way
| Published date | 01 October 2003 |
| DOI | https://doi.org/10.1108/13685200310809707 |
| Date | 01 October 2003 |
| Pages | 379-382 |
| Author | Dina Balleyguier |
| Subject Matter | Accounting & finance |
The Fight Against Money Laundering Ð
The Swiss Way
Dina Balleyguier
Three areas will be examined in this paper, describing
the Swiss ®ght against money laundering. First, what
is intended by non-bank non-insurance ®nancial
institutions subject to anti-money laundering (AML)
rules; secondly, the mix of direct and indirect
supervision that has been enacted in this ®eld; and
last but not least, some indications about the rele-
vant due diligence requirements will be given, in
particular those related to the identi®cation of the
bene®cial owner.
SUPERVISED FINANCIAL
INSTITUTIONS
Registration or supervision?
For a long time, the ®ght against money laundering
concentrated on banks. Later on, some jurisdictions
extended their anti-money laundering legislation to
non-banking ®nancial institutions, speci®cally
broker-dealers and life insurance as well as bureaux
de change and money transmitters. In recent times,
the European Union extended the scope of the
anti-money laundering rules to new institutions and
professions and the Financial Action Task Force
(FATF) is considering doing so.
There has never been any doubt that prudentially
supervised institutions, ie those that already have a
regulator for other purposes, like banks, should also
be supervised by their regulator as far as anti-
money laundering regulations are concerned. In the
area of institutions and professions which are not
prudentially supervised, eg bureaux de change and
money transmitters, the situation is however dierent
from country to country. Some jurisdictions only ask
non-prudentially supervised institutions to apply
identi®cation requirements and report suspicious
transactions but without subjecting them to any
registration or licensing. Other jurisdictions allow
the exercise of these professions and businesses only
for duly registered or licensed institutions. A third
category furthermore provides for some kind of
supervision.
Switzerland is an example of the third category as
there is provision for a full anti-money laundering/
combating ®nancing of terrorism (AML/CFT)
supervision for all ®nancial institutions, even if they
do not have a prudential regulator. This AML/CFT
supervision is then ensured by the Money Laundering
Control Authority.
As in other jurisdictions, banks and insurance
companies are licensed and supervised for AML/
CFT purposes by their prudential regulator. Most
of the non-bank non-insurance ®nancial institutions
in Switzerland are members of a self-regulatory orga-
nisation, which in turn has been authorised and is
supervised by the Money Laundering Control
Authority. However, some of these ®nancial institu-
tions chose to ask for a direct licence with the Control
Authority. But each ®nancial institution, either pru-
dentially regulated and supervised, or member of a
self-regulatory organisation (SRO) or licensed by
the Money Laundering Control Authority, has to
implement the same legal provisions concerning the
identi®cation of the counterparty and the bene®cial
owner and the reporting of suspicious transactions.
De®nition of ®nancial institutions by
reference to ®nancial activities
The scope of the Money Laundering Act is very
broad. According to this Act, every person that, by
profession, accepts possession or custody of assets
belonging to third parties, or helps to invest or trans-
fer them is subject to the full set of due diligence
requirements and supervision. This involves in parti-
cular all leasing companies and other credit institu-
tions, money transmitters and payment services,
dealers in precious metals, commodities or securities,
bureaux de change, asset managers, as well as some
lawyers, as far as they provide services in these
®elds, in particular when acting as directors for
domiciliary companies or as trustees.
Concerning the latter, it is important to be precise
in asserting that not all company service providers
are subject to the Money Laundering Act. As
long as they provide services which do not give
them any power of disposition on assets of their
customers, eg when they create companies or
Page 379
Journal of Money Laundering Control Ð Vol. 6 No. 4
Journalof Money Laundering Control
Vol.6, No. 4, 2003, pp. 379± 382
#HenryStewart Publications
ISSN1368-5201
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