Countries/Jurisdictions of Primary Concern - Switzerland
Switzerland is a major international financial center. The country’s central geographic location; relative political, social, and monetary stability; the range and sophistication of financial services it provides; and its long tradition of bank secrecy not only contribute to Switzerland’s success as a major international financial center, but also continue to expose Switzerland to potential money laundering abuse.
Reports indicate that criminals attempt to launder illegal proceeds in Switzerland from a wide range of criminal activities conducted worldwide. These illegal activities include, but are not limited to, financial crimes, narcotics trafficking, arms trafficking, organized crime, terrorism financing, and corruption. Although both Swiss and foreign individuals or entities launder money in Switzerland, foreign narcotics trafficking organizations, often based in Russia, the Balkans, Eastern Europe, South America, and West Africa, dominate the narcotics-related money laundering operations in Switzerland.
There are currently 21 casinos in Switzerland. Every casino must obtain a concession from the Federal Council (the highest authority of the executive branch) that needs to be renewed every 20 years. While generally well regulated, there are concerns casinos may be used to launder money. One possible method involves the structuring of cash purchases of casino chips or tokens to avoid reporting requirements and subsequently redeeming the chips for checks drawn on, or wire transfers from, casino bank accounts. Corrupt casino employees also have facilitated drug money laundering activities.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: http://www.state.gov/j/ct/rls/crt/
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR ILLEGAL DRUG SALES THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes
Are legal persons covered: criminally: YES civilly: YES
KNOW-YOUR-CUSTOMER (KYC) RULES:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
KYC covered entities: Banks; securities and insurance brokers; money exchangers or remitters; financial management firms; investment companies; insurance companies; casinos; financial intermediaries; wealth managers and investment advisors
Number of STRs received and time frame: 1,585 in 2012
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks; securities and insurance brokers; money exchangers or remitters; financial management firms; casinos; financial intermediaries; wealth managers and investment advisors
MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:
Prosecutions: Not available
Convictions: 213 in 2013
RECORDS EXCHANGE MECHANISM:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Switzerland is a member of the FATF. Its most recent mutual evaluation can be found at: http://www.fatf-gafi.org/countries/s-t/switzerland/
ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:
The number of suspicious activity reports decreased by 2.5 percent from 2011 to 2012, encompassing a total of CHF 3.2 billion (approximately $3.4 billion), compared to CHF 3.3 billion (approximately $3.5 billion) in 2011. In 2012, 15 reports were related to terrorism finance, amounting to CHF 7.47 million (approximately $7.97 million).
There is a lack of adequate regulation of some designated non-financial business sectors, such as real estate, jewelry, luxury cars, works of art, and commodities like oil and gas. Swiss authorities should take steps to regulate these sectors.
Sports associations like the International Federation of Association Football or the International Olympic Committee are not businesses but associations. They do not pay taxes, and as associations, are exempted from the Swiss anti-corruption legal framework. The exception provided to these entities makes them more vulnerable to money laundering activity. The government should consider efforts to change applicable laws.
Since 2009, persons physically transferring money worth more than $10,600 into or out of Switzerland need to be able to specify its origins, its future destination, and its owner, but only if asked by the Swiss authorities.
New rules, implemented on November 1, 2013, now allow the Swiss federal police force AML unit (MROS) to exchange financial information with other financial intelligence units, enhancing Switzerland’s capacity to fight money laundering. In 2012, MROS replied to 598 requests for non-financial information from foreign countries. With the new, more permissive rules in place since November 1, the number of responses to requests from other jurisdictions is likely to increase.