Changes In Swiss Law To Tackle Money Laundering

Legislation has come into force in Switzerland that includes anti-money laundering measures. Rahman Ravelli outlines the main points.

The Swiss Financial Market Supervisory Authority (FINMA) is now taking a tougher approach to tackling money laundering.

The new Swiss Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) came into force on January 1st, 2020. These new laws have seen FINMA commit to holding public consultations on the new regulations until April 9th, 2020. 

The most significant change which the regulator sought was the lowering of the threshold value for crypto exchange transactions. FINMA has proposed an amendment in its Anti-Money Laundering Ordinance which seeks to change the client identification threshold values from 5000 Swiss francs to 1000 Swiss francs; which will see FINMA implementing the international standard in managing the heightened money laundering risks in the cryptocurrency industry.

FinSA and FinIA are part of the new Swiss financial market structure that covers supervision (which has been addressed by the Financial Market Supervision Act, FINMASA), infrastructure (addressed in the Financial Market Infrastructure Act), services (FinSA); and supervised entities (FinIA).

FinSA sets out cross-sector rules for offering financial services and distributing financial instruments. These rules are based on the EU directives (MiFID II, Prospectus Directive, PRIIPs) but include adjustments to take into account Switzerland’s particular circumstances.

In December 2019, the Federal Council approved examining the opportunities and risks of the crypto franc (also known as the e-franc). It then announced that it did not think Switzerland would gain any benefits from universally accessible central bank currency and that technology could pose new risks and hamper Swiss financial stability. Its analysis concluded that the central bank digital currency could have far-reaching repercussions, depending on how it is designed. It concluded that better solutions could be developed in the concerned areas.

This article was also featured on Lexology.com.