Revised FATF recommendations: consultation results and follow-up work

Bern, 04.09.2013 - Today, the Federal Council took due note of the results of the consultation on the Federal Act for Implementing the revised Financial Action Task Force (FATF) recommendations of 2012. The aim of the new act is to enhance the fight against money laundering. The Federal Council has determined the direction to be taken in follow-up work based on the results of the consultation and instructed the Federal Department of Finance (FDF) to prepare a dispatch for the attention of parliament by the end of 2013.

The consultation conducted from 27 February to 1 July 2013 revealed that the vast majority of participants welcomed the implementing draft and deemed it necessary in view of the development of international financial crime. They believe that the draft boosts the credibility, attractiveness and stability of the financial centre. During the consultation, however, it was also proposed that some measures be more practice-oriented and desired that the regulatory level of competing financial centres be taken into consideration.

The Federal Council has taken on a whole series of technical changes proposed during the consultation but generally maintained its concept of 27 February 2013. In the following three areas, in contrast, the Federal Council is envisaging changes in order to factor in the opinions of those who participated in the consultation procedure:

  • Bearer shares: Supplementing the measures proposed on 27 February, the Federal Council is examining the introduction of an alternative transparency measure in the event of dematerialised bearer shares being deposited with a third party (i.e. in the form of electronic registration). In contrast, it will not pursue the share immobilisation model (i.e. (physical deposit), as its introduction at the present time would interfere with the revision of company law.
  • Tax offences as predicate offences to money laundering: In the area of direct taxes, it is proposed to examine incorporating the predicate offence to money laundering in the Criminal Code rather than in the criminal law relating to tax offences. In this way, account is taken of the opinion of most consultation participants, who believe the implementation of tax offences as predicate offences should not interfere with the revision of criminal law relating to tax offences. The proposal of 27 February is maintained for indirect taxes, however.
  • Reporting system in the event of suspicions: The Federal Council is maintaining its main proposal of using the deferred freezing of assets to improve the effectiveness of the reporting system in the event of suspicions. Regarding the duty to report, however, the Federal Council has taken on the consultation proposals of setting a deadline for the analyses of the Money Laundering Reporting Office Switzerland (MROS) in order to limit the burden for financial intermediaries when performing their duties. Moreover, the right to report is maintained, thereby preserving a tried and tested system.

The dispatch also contains the legislative changes needed to implement the revised FATF recommendations regarding the freezing of assets held by terrorists or terrorist organisations. With this amendment of the Anti-Money Laundering Act (AMLA), the current system is merely set out in a formal procedure that creates legal certainty for financial intermediaries and improves the implementation of the corresponding FATF recommendation.

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