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Switzerland Praised For Combatting Financial Crime

by Ulrika Lomas, Lowtax.net, Brussels
12 December, 2016

The Swiss Federal Council has hailed the publication of the Financial Action Task Force's (FATF's) fourth mutual evaluation report on action taken to combat money laundering and terrorist financing, stating that "overall Switzerland's results can be considered to be good."

The Federal Council said Switzerland was assessed as compliant or largely compliant with respect to 31 of the 40 FATF recommendations. It added that the report from FATF, published on December 7, had found that there are no significant gaps in Switzerland's regime.

According to the Council, "Switzerland got good marks amongst other things for the criminalization of money laundering and terrorist financing, mutual assistance, targeted financial sanctions, the transparency of legal entities and legal constructs (including trusts), and the Money Laundering Reporting Office Switzerland (MROS)."

FATF found that there is a good understanding of money laundering and terrorist financing risks in Switzerland, and praised the quality of the analysis of financial information by the MROS and its appropriate use of criminal investigations. The Council said that FATF had noted that Switzerland had seized substantial sums and refunded them to the relevant countries, and had acknowledged the appropriate implementation of targeted financial sanctions.

However, the Council said that FATF had identified some vulnerabilities in the system, relating in particular to "the preventative measures and the subordination to the Money Laundering Act of lawyers, notaries, and fiduciaries relating to some non-financial activities such as the establishment of companies and trusts."

FATF also criticized certain aspects of financial intermediary supervision and the international cooperation of the MROS, and said there is room for improvement in the implementation of preventative measures on the part of financial intermediaries. "On this point, the number of suspicious activity reports is considered to be too low in relation to the significance of the Swiss financial center," the Council explained.

The Federal Department of Finance will analyze the recommendations in the context of the interdepartmental coordinating group on combating money laundering and the financing of terrorism. It will submit proposals to the Federal Council in 2017. Switzerland will be subject to a follow-up process by FATF.

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