SWITZERLAND Trends and Developments Contributed by: Jean-Marc Carnicé, Canonica Valticos Carnicé & Associés
are obligated to investigate the transaction and clarify its economic background and purpose. If the financial intermediaries remain uncertain after these clarifications, they must report the transaction to the MROS under Article 9 AMLA. This duty of clarification is not limited to indi - vidual transactions. It extends to examining the entire business relationship, especially when a series of transactions or a sudden unusual trans - fer raises doubts. Suspicion is considered well-founded when there are clear signs that the assets involved might have a criminal origin. In assessing the presence of such suspicion, particular reference should be made to the list of money laundering indicators annexed to the Anti-Money Launder - ing Ordinance of the Swiss Financial Market Supervisory Authority (AMLO-FINMA). Notable examples include: • transactions where the economic purpose is not recognisable or is inconsistent with the client’s usual activities; eg, sudden large transfers without a clear reason (Indicator 2.1.1 of the Annex to AMLO-FINMA); • transactions that do not align with the inter - mediary’s knowledge of the client or the nor - mal purpose of the business relationship; eg, frequent transfers between multiple accounts with no clear justification (Indicator 2.1.5 of the Annex to AMLO-FINMA); • assets deposited into an account and then withdrawn quickly, especially when the cli - ent’s normal activity doesn’t justify such immediate withdrawals (Indicators 2.1.2 and 3.2.14 of the Annex to AMLO-FINMA); and • economically absurd structure of business relations between a customer and the bank; eg, large number of accounts with the same institution, frequent transfers between differ -
ent accounts, excessive liquidity, etc (Indica - tor 3.2.4 of the Annex to AMLO-FINMA). If the financial intermediaries are unable to resolve the suspicion after conducting appropri - ate inquiries to clarify the situation (eg, if the cli - ents refuse to provide necessary information or if their explanations are unsatisfactory), a report to the MROS becomes mandatory. Failure to fulfil the reporting obligation can lead to significant penalties. If the breach is inten - tional, the fine may reach up to CHF500,000, whereas negligence can result in a fine of up to CHF150,000 (Article 37 AMLA). It is worth emphasising that the question of whether a financial intermediary may also be liable for the separate offence of money laundering under Arti - cle 305bis of the Swiss Criminal Code remains a distinct legal assessment. A failure to report does not preclude, nor does it replace, poten - tial liability for money laundering itself – the two offences are independent and may be pursued cumulatively where the circumstances so war - rant. Judicial developments – recent Swiss case law on AML reporting duties The life cycle of the duty to report has been clari - fied in recent case law – from the moment it falls upon someone ( Who carries the duty? ), through its scope and extent ( What triggers the duty? ), to its termination ( When does the duty end? ). Through this lens, we will examine how the Swiss federal courts have refined key aspects of reporting obligations and clarified their impli - cations for financial intermediaries.
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