Switzerland attaches great importance! money laundering

[FaGal]

Implementation of the revised FATF Recommendations on money laundering: opening of the consultation procedure

12 Jan 2005 - The Federal Council has today opened consultation procedures on a number of legal amendments through which the revised Recommendations of the Financial Action Task Force on Money Laundering (FATF) will be implemented. These Recommendations are regarded as international standards in efforts to combat money laundering and terrorist financing. In addition, the Money Laundering Act will be amended based on experience gathered to date. The consultation procedure will continue up to mid-April.

Switzerland attaches great importance to a healthy financial centre. It is particularly committed to ensuring that the financial centre is not abused for criminal purposes, in particular for money laundering or terrorist financing. Switzerland has played an active role in the activities of the Financial Action Task Force on Money Laundering (FATF) since its creation in 1989. The focus of the FATF is to draw up internationally valid standards designed to prevent money laundering and terrorist financing. This was the basis for the 40 FATF Recommendations which in recent years have been complemented by the nine Special Recommendations aimed at combating terrorist financing. Switzerland’s legal provisions comply with these Recommendations.

Recommendations adapted to new forms of criminality

In June 2003, the FATF completely revised the 40 Recommendations for the first time since they were initially issued and updated them to take into account new forms of criminality in the money laundering and terrorist financing sectors. In October 2003, the Federal Council instructed the FDF to prepare the implementation of the revised Recommendations through an interdepartmental working group. At the same time the instruction was also given to amend the Money Laundering Act of 1998 based on experience gathered to date. The corresponding amendments are primarily technical in nature.

Today, Swiss legislation already broadly conforms with the new FATF standards. The standards do, however, diverge from current Swiss legislation and policy on combating money laundering in a few points. The list of criminal activities which can be considered predicate offences for money laundering has been extended in the new Recommendations. New on the list are counterfeiting of goods, product piracy, people trafficking and serious smuggling offences, together with insider trading and share price manipulation. This requires amendments to the Swiss Criminal Code, the Copyright Act, the Foreign Nationals Act, the Act on Administrative Criminal Law and the Act on Mutual Assistance in Criminal Matters. In addition transparency in companies which issue bearer shares is to be increased.

The subordination of several professions and activities outside the financial sector and extending the obligation to report to include specific situations in which negotiations are discontinued before a business relationship is established, require a change to the Money Laundering Act in the financial sector.

Due to the global increase in terrorist financing in the last few years, the Financial Action Task Force on Money Laundering (FATF) has extended the recommendations originally drawn up to combat money laundering to cover the combating of terrorist financing. This development is taken into account in the draft amendments.

Attention paid to appropriate measures

In international comparison, Switzerland possesses a solid and extensive set of measures to combat money laundering. This fact is also acknowledged abroad. It is in Switzerland’s interests as a location for business to continually update the system it has in place to combat money laundering and terrorist financing. For that reason Switzerland supports the revised FATF Recommendations and is consequently in the process of making the necessary legislative amendments.

In preparing the draft amendments for consultation, attention was paid to ensuring that the measures to be taken are appropriate and that the resulting body of regulation and administrative burden are kept to a minimum.

The draft amendments coincide with Switzerland’s third round mutual evaluation by member states of the FATF following those of 1992 and 1998. The evaluation will take place in spring 2005. Both projects, namely the implementation of the revised FATF Recommendations and the country evaluation, are coordinated with each other.

The consultation procedure will continue up to mid-April.

Auskunft für Medienschaffende:
Ambassador Alexander Karrer, Federal Finance Administration, Head of the Monetary Affairs and International Finance Division, tel. 031 324 95 84

Riccardo Sansonetti, Federal Finance Administration, Head of the Department on Combating International Financial Crime, tel. 031 322 62 07

Annette Althaus Stämpfli, Federal Finance Administration, Department on Combating International Financial Crime, tel. 031 322 60 87

12 Jan 2005

[FaGal]

Swiss Banking Body Criticizes Adaptation Of FATF Rules
www.nasdaq.com - March 10, 2004


ZURICH -(Dow Jones)- The Swiss Bankers Association Thursday criticized Switzerland's adaptation of money-laundering rules as set out by the Financial Action Task Force.

"Even a brief perusal shows that things have been rushing along very quickly and without adequately considering the economic impact," SBA Chief Executive Urs Roth said at a press conference.

The task force, or FATF, is an intergovernmental policy body.

Roth criticized the FATF's plan to define insider trading or price manipulation as predicate offenses to money-laundering, saying that originally, the plan was to only include offenses that can be traced back to organized crime.

Turning to the implementation of a savings tax directive with the European Union, Roth said that he estimates costs for Swiss banks arising from the implementation to run around CHF300 million.

In terms of revenue to be generated by the tax, Roth said that because of the directive's limited scope, low interest rates and the initial withholding tax rate of 15%, no "fiscal miracle" should be expected.

Switzerland is on track for implementing the directive on July 1, Roth said