SWITZERLAND Law and Practice Contributed by: Judith Raijmakers and Florian Thomas Willi, Loyens & Loeff
effective control over the contractual partner in any other way. • Finally, in a third step, if no controlling party could be identified in steps one and two, the managing director of the contracting party is recorded as the controlling party. The above steps can be completed in a written declara - tion or via Form K appended to the CDB 20 (or equivalent purpose-made declaration). For non-operating entities (domiciliary compa - nies), the above cascade does not apply. The decisive factor here is the possibility of the bene - ficial owner (alone or together with other benefi - cial owners) to make the final decision on the use of the assets held by the domiciliary company. Swiss banks further need to obtain a declara - tion from the contracting party as to who is the beneficial owner of the assets deposited with the bank. This can be done via Form A appended to the CDB 20 (or equivalent purpose-made dec - laration). Special Duties of Due Diligence Swiss banks must establish the type and pur - pose of the business relationship intended by the contracting party (the extent of the inquiries depends on the risk associated with the con - tracting party). In certain cases – eg, in the event of an increased-risk business relationship or transaction, the bank must establish the back - ground and purpose of a business relationship or transaction. For that purpose, banks must develop risk criteria to identify business relation - ships or transactions with increased risks. Organisational Measures, Documentation and Retention Obligations Swiss banks need to establish an internal AML department that monitors compliance on an ongoing basis. Such department needs to, inter
alia, (i) issue instructions; (ii) be the first point of contact in AML/CFT matters; and (iii) plan and make sure that the staff are adequately trained on AML/CFT matters. Further, in-house controls with respect to AML/CFT compliance need to be made. Swiss banks further need to ensure adequate documentation and retention of documents. All documents required in connection with the fulfilment of due diligence obligations must be retained for ten years after the transaction in question has been carried out or the relevant business relationship has been terminated. Reporting Duties and Additional Measures Banks must, in the event of reasonable sus - picion of ML or TF, immediately report to the Money Laundering Reporting Office (MROS). This includes, inter alia, circumstances where such bank knows or has reasonable grounds to suspect that the assets involved in the business relationship are connected with ML or criminal organisations, derive from a crime or a qualified tax offence or serve for TF. Swiss banks must further observe the asset freezing and confidentiality rules set out in AMLA. In particular, Swiss banks must enact an asset freeze with respect to assets entrusted to them as soon as MROS informs them that it will forward a report to a prosecution authority (sub - ject to certain exceptions where assets need to be frozen immediately). Swiss banks are gener - ally prohibited from informing the persons con - cerned or any third parties about a report made to MROS. This is subject to certain exceptions – eg, if the Swiss bank cannot enact the asset freeze itself, it may inform the financial interme - diary that can enact such asset freeze.
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