SWITZERLAND Law and Practice Contributed by: Lukas Morscher and Lukas Staub, Lenz & Staehelin
to take appropriate measures to avoid conflicts of interest. As a general principle, most regulated entities (eg, asset managers, managers of col - lective assets, insurers) are also required by law to pursue activities only related to their respec - tive regulatory status. FINMA may, however, grant exemptions subject to applicable laws. 2.14 Impact of AML and Sanctions Rules Many fintech companies are likely to qualify as financial intermediaries and may, therefore, be subject to AMLA. Fintech companies subject to AMLA are not only required to join an SRO (unless otherwise supervised by FINMA – eg, as a bank), but AML obligations also include due diligence obliga - tions (including KYC rules and record-keeping obligations), reporting obligations in the event of a suspicion of money laundering or obligations to freeze assets under certain conditions. AMLA is relatively easy to comply with and should not represent a significant entry barrier. However, dealing with the associated costs requires care - ful planning, and business models may need to be adapted. This applies particularly to fintech companies providing alternative finance (eg, crowd investment) platforms, payment services or the professional purchasing and selling of vir - tual currencies. As regards sanction rules, the Federal Council adopted the sanctions packages imposed by the EU in view of the war between the Rus - sian Federation and Ukraine for Switzerland on 28 February 2022. The Federal Council has since consistently updated the Swiss sanctions regime to take account of additional EU sanc - tions packages that have been enacted in the meantime (subject to very limited exemptions). The Swiss Federal Ordinance is instituting meas - ures in connection with the situation in Ukraine
including, among others, financial sanctions against certain listed individuals and businesses and bans on providing certain financial services to Russian nationals as well as individuals and businesses residing in the Russian Federation. Compliance with sanctions may be operation - ally challenging and requires utmost care, as breaches of sanctions regulations may result in legal and reputational risks for fintech compa - nies. The Swiss State Secretariat for Economic Affairs (SECO) maintains a public website with information and guidance on export control and sanctions. 2.15 Financial Action Task Force Standards Switzerland has been a member of the Finan - cial Action Task Force (FATF) since 1990 and, according to the Swiss federal government’s published financial market policy, is actively involved in the work of the FATF for effective and appropriate solutions and the uniform imple - mentation of standards worldwide. In the FATF’s most recent full assessment of Switzerland’s AML/combatting the financing of terrorism (CFT) regime, the FATF found that it “is technically robust and has achieved good results” , but that it “would still benefit from some improvements” . In its most recent follow-up report, the FATF attested Switzerland has made “progress in addressing the technical compli- ance deficiencies identified” . In 2024, the Federal Council published draft leg - islation that would, among other things, introduce into AMLA a mandatory transparency register on beneficial owners of legal entities and expand AMLA’s applicability to certain advisors, includ - ing lawyers. This proposed legislation, which is subject to parliamentary proceedings and will therefore not enter into force before 2026 at the
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