Revision of the FATF Standards

General remarks to the FATF standards

  • Switzerland became involved in combating money laundering at an early stage, introducing corresponding regulations such as lifting banking secrecy in cases of suspected money laundering . The Swiss regulation with regards to the identification of the contracting partner and beneficial owner were the inspiration for some of the FATF's 40 recommendations.
  • The results of Switzerland's latest FATF mutual evaluation in 2005 were very good. Because its deficiencies were only minor, Switzerland was able to undergo a simplified process for this mutual examination in comparison to countries such as Germany or the US.
  • The aim of the of the FATF's recommendations revision is improving the fight against money laundering and the financing of terrorism by taking recent developments into account. A total of 39 of the existing recommendations have been revised.
  • Switzerland's reputation would seriously be compromised by not adopting the revised FATF recommendations.
  • For the most part, the revised FATF recommendations do not require significant changes in the Swiss regulation. Swiss banks are already applying most of the revised recommendations. For example, they have implemented a risk-based approach for assessing client relationships or they are disclosing the identity of trustees using Form T.

SBA statement concerning the revision of the FATF standards

  • The SBA acknowledges the need to revise and improve the recommendations from time to time, and therefore welcomes the proposals in principle.
  • The SBA has always expressed scepticism concerning the addition of tax crimes to the list of predicate offences. The SBA welcomes the fact that the FATF leaves it up to the respective countries to define the terms of the crime as predicate offence for money laundering.
  • The SBA expects Switzerland to follow the FATF's recommendations relating to tax crimes as predicate offences for money laundering. In addition to the existing criminal offence of tax fraud, a qualified criminal offence must be defined that includes bad faith and a high volume threshold in addition to the forgery of documents. This will also meet the FATF's requirement that only serious crimes and not trivial offences should be considered predicate offences for money laundering.
  • The SBA also welcomes the fact that the FATF recognizes the Swiss regulations for listed companies with regard to bearer shares (share register). Switzerland must now work on a practicable solution for non-listed companies with bearer shares.
  • The exchange of financial data between financial information units (FIUs) for the purposes of analysis is aimed at improving the fight against money laundering and is therefore understandable in principle.
  • However, it is absolutely essential that the exchange of information between FIUs adheres strictly to data protection requirements. Financial data shall therefore only be exchanged between FIUs in connection with specific cases, and shall only be transmitted to other authorities with a written approval of the MROS and in accordance with the provisions of Swiss data protection law. This will prevent the normal administrative and judicial assistance procedures from being circumvented.