On 18 July 2018, FINMA published its revised Anti-Money Laundering Ordinance (the AMLO-FINMA). The revised AMLO-FINMA is noteworthy not so much for what it contains, but rather for what it does not contain.
By Katrin Ivell (Reference: CapLaw-2018-45)
On 18 July 2018, FINMA published its revised Anti-Money Laundering Ordinance (the AMLO-FINMA). During the public consultation period (Vernehmlassungsprozess), 29 parties (mostly banks and self-regulation organizations, but also e.g. Transparency International Switzerland and the Swiss Law Society (Schweizerischer Anwaltsverband)) commented on (and criticized) what was then the draft AMLO-FINMA. Among the planned changes that attracted particular criticism featured (1) the mandatory verification of the beneficial owner of assets, and (2) the mandatory periodic review (and, if necessary, update) of the customer information (KYC). Some parties doubted that there was a sufficient legal basis for FINMA to introduce these obligations by way of including them in the AMLO-FINMA. Recognizing that an introduction of these obligations might consequently lead to increased legal uncertainty, FINMA dropped these two proposals for inclusion in the AMLO-FINMA. Instead, they now feature as proposals in the Anti Money Laundering Act (AMLA) which is currently also undergoing a revision process. Another notable provision that did not survive the draft stage of AMLO-FINMA relates to FINMA’s proposal to include business relationships that involve other service providers among the catalogue of “increased risk”-examples. FINMA’s proposal specifically singled out scenarios where third parties are involved (1) in the referral of the business relationship to the bank (e.g. finders, introducers) or (2) in its management (such as external asset managers) for constituting potential “increased risk”-factors.
The result is a revised AMLO-FINMA that contains new (or revised) provisions relating, among other things, to the following:
- Requirements for the global monitoring of risks;
- Mandatory risk management measures where domiciliary companies or complex structures are used and where there are links with high-risk countries; and
- The identification measures for cash transactions (specifically, the previous threshold of CHF 25,000 has been lowered to the FATF level of CHF 15,000)
Somewhat unusually, it is already foreseeable that some of the provisions of the AMLO-FINMA that have now been revised may need to be revised yet again even before they are due to enter into force. This is because the AMLA is also currently undergoing a revision process (see above). One of the proposed changes to the AMLA concerns the simplification of what is currently a two-tiered system of notification of suspicious activity (one voluntary regime, one mandatory regime) into one mandatory notification reporting system of suspicious activities. If the changes to the AMLA will survive the public consultation period and enter into force, the provisions of the revised AMLO-FINMA that deal with the voluntary reporting of suspicious activities will become obsolete and will have to be deleted.
Subject to the comments made above, the revised AMLO-FINMA will enter into force on 1 January 2020, together with (1) what is anticipated by then to be the revised AMLA; and (2) the revised Agreement on the Swiss Banks’ Code of Conduct with regard to the Exercise of Due Diligence (VSB).
Katrin Ivell (katrin.ivell@homburger.ch)